Jun. 18, 2013

http://www.app.com/article/20130617/NJNEWS14/306170077/James-Habel-former-Wall-superintendent-indicted-fraud-theft-charges

FREEHOLD — One of the largest corruption schemes in Monmouth County’s history, uncovered in detail on Monday, started with a phone call.

Investigators then found a long-running scam that lined former Wall schools superintendent James F. Habel’s pockets, according to an indictment against Habel. He fleeced taxpayers through a two-part scheme that paid him more than $360,000, acting Monmouth County Prosecutor Christopher J. Gramiccioni said.

Habel, 56, who retired last year, is also accused in a grand jury indictment of mortgage fraud of more than $1 million. And last year he conspired to cover up an alleged — but ultimately unproven — sexual assault at a township school that resulted in his deputy, assistant superintendent Sandra D. Brower, being charged last month, according to a second indictment.

Habel’s attorney, Robert A. Honecker Jr., said he is in Florida but will return to New Jersey for his scheduled first appearance on the charges on Monday, June 24.

Honecker said Habel “will vigorously defend against both indictments and press for a speedy trial because he is innocent of all charges.”

Habel’s abrupt transition from education leader to allegedly corrupt public official can be traced to an August 2012 phone call, when Gramiccioni’s office received a tip through its general hotline claiming that Habel was engaged in corruption in Wall.

Gramiccioni suggested that more charges may come in Wall, saying that the investigation is “ongoing in and around the Wall Township School District.”

Habel was well compensated, Gramiccioni said. He started working for the district in 2003 at a salary of $145,000 and retired last year making $225,000, according to the indictment. He also had 25 vacation days, five personal days and five sick days, plus a free GMC Yukon Denali, according to the indictment.

Those vacation days were inflated to benefit Habel. Though Habel was often taking long weekends, throughout his tenure he cashed in $268,000 worth of vacation time he did not report to the district, according to the indictment. And when he retired last year, he falsified having 110 vacation days, which he cashed in for an exit payment of $93,000, according to the indictment.

It is one of the the county’s most ambitious and lucrative scams, and Gramiccioni said his office is not tolerating it.

“We’re always focusing on every level of crime we have here in Monmouth, but this is something that’s not going to fly below the radar,” Gramiccioni said. “There’s no excuse for this type of activity.”

Current Wall Superintendent Daniel D. Simon Sr. released a statement that said the district is cooperating with the investigation and, in order to avoid interference, cannot answer questions.

“Obviously, the board and the current administration must leave any comments as to the specific allegations to the prosecutor’s office for an appropriate response,” the statement said. “However, please be assured that the pendency of these charges, as well as any ultimate outcome, will have no impact or effect upon the educational programs for district’s students, staff and the community.”

After that initial phone call tipping investigators, Habel’s former home in Point Pleasant was raided in September and several witnesses were interviewed, Gramiccioni said.

The work led to the two indictments against Habel.

The misconduct began in October 2003, seven months after he got the job as schools chief, according to the indictment.

In December 2011, he told the district information technology director to delete emails from some school board members and from an airline that Habel frequently used to travel to Florida. The IT director did not delete the emails, according to the indictment.

That month Habel also shredded, removed or destroyed all of his office files.

After he left the district, he failed to return a Dell desktop, a flat-panel monitor, a Dell laptop, a Motorola Droid cellphone and an Apple iPad, worth a total of $8,771. He ignored a district employee’s repeated attempts to retrieve that equipment, according to the indictment.

Habel’s alleged misconduct also crossed into the real estate market. After Habel announced he was retiring from Wall schools, he refinanced his homes in Point Pleasant and Dunedin, Fla., Gramiccioni said. During the refinancing process, Habel lied by saying that he would be employed by the school district for the foreseeable future, making $18,000 a month, rather than the roughly $9,700 in pension payments he was due, according to the indictment.

Habel sold his Point Pleasant home, a waterfront ranch on Blue Heron Court, for $630,000 in September, according to property records.

A separate indictment charges Habel with a cover-up in 2009 that also involved Brower, his assistant superintendent.

Brower, 46, was indicted in May on charges of failing to report allegations that a teacher improperly touched a child. Officials have said that there was no truth to those allegations, but school officials were obligated to report them to police.

If convicted, Habel faces up to 20 years in prison.

Habel’s pension of approximately $117,200 a year could be reduced by the Teachers’ Pension and Annuity Fund board of trustees, but a determination won’t be made until after the legal proceedings, including any appeals, are concluded, said William Quinn, a spokesman for the state Department of the Treasury, which includes the Division of Pensions and Benefits.

“The determination depends on the facts of the case. The pension’s board of trustees will look at all of the facts of the case and then make a determination about how serious the misconduct was and what degree of forfeiture would be appropriate, depending on the extent to which it interfered with his public service,” Quinn said. “They would go back and look at his whole career and see what part of his service was tainted by the misconduct.

“It’s really case by case, and it’s very fact-specific,” Quinn added. “It’s not an automatic decision. They have to look at the whole picture — what crimes have been charged, what he’s been convicted of, over what period of time the misconduct took place, what the harm to the public interest is and was there any part of his career that he was providing honorable service to the public. They weigh all those factors in coming up with a final decision.”

“You have people who get some power, and it goes to their heads,” said Wall resident Tom Eck, 46. “Unfortunately for me, it’s going to be too late for my kids, but it’s the right thing to do.”

Given that two former top school officials are now under indictment and there is an ongoing investigation in the district, Eck said the district is “in shambles.” He has one daughter who attended from fourth to eighth grade and has a son in the intermediate school. He believes district leadership needs to be rebooted.

For Gramiccioni, it is a priority to find those whose power veers into criminality.

“Public officials, they take an oath to uphold the law and do the best for the people that they represent, in this case the school district,” Gramiccioni said. “Fleecing the school district, when you’re already well-compensated as it is, isn’t something I think anyone should tolerate.”

Gramiccioni said the public is encouraged to share tips of misconduct by calling 855-7-UNJUST (855-786-5878) or sending an email to cor­rup­tion@co.mon­mouth.nj.us with “corruption” or “misconduct” in the subject line.