Insurance Broker and Former Toms River, N.J., Mayor Get Prison Sentence

January 7, 2014

A New Jersey insurance broker and the former mayor of Toms River, N.J., were each sentenced Monday for separate schemes involving officials of Toms River and the former insurance broker for the Toms River regional school district, Francis Gartland.

Frank Cotroneo, 63, an insurance broker with an office in Morristown, N.J., was sentenced to 37 months in prison and was ordered to pay more than $12.4 million in restitution to the Toms River school district and in forfeiture to the United States.

Cotroneo previously pleaded guilty to one count each of bribery and tax evasion arising from his participation in a scheme to pay hundreds of thousands of dollars in bribes to Michael Ritacco, 67, of Seaside Park, N.J., the former superintendent for the Toms River regional school district, in exchange for his official assistance.

Additionally, Carmine Inteso, Jr., 47, of Toms River, was sentenced to six months in prison and six months of house arrest for evading his income tax obligations. Inteso, who was arrested in July 2012 after returning from Afghanistan where he had been working as a contractor, pleaded guilty in 2012 to one count of tax evasion.

From 2002 through 2007, Inteso held the positions of Township Committee member, mayor, deputy mayor, and councilman for the Township of Toms River, formerly known as Dover Township.

Inteso allegedly took a job in Afghanistan after learning he was the target of the tax investigation and, after returning to the United States, was taken into custody at New York’s John F. Kennedy airport.

U.S. District Judge Joel Pisano imposed the sentences Monday in Trenton, N.J., federal court.

According to documents filed and statements made in court:

Cotroneo admitted that from 2002 to April 2009, he and co-conspirators Gartland and Frank D’Alonzo, a former administrator at the Toms River regional school district, paid bribes and other benefits to Michael Ritacco, who was then the superintendent of the district.

The payments were made to allow Cotroneo and Gartland, 72, of Baltimore, Md. — insurance co-brokers for the school district — to obtain and keep the lucrative insurance brokerage contracts with the district.

To facilitate the scheme, Ritacco, Gartland, and Cotroneo agreed to have Ritacco approve a workers’ compensation insurance contract between Gartland and the school district, which yielded between $500,000 and $600,000 annually in excess fees. Those proceeds were to be used to make hundreds of thousands of dollars in bribes to Ritacco, authorities said.

Cotroneo also admitted that for tax years 2005 to 2007, he evaded the assessment of hundreds of thousands of dollars of federal income taxes by concealing the illegal proceeds he received from Gartland and others during the course of the bribery scheme.

Ritacco and Gartland were ordered previously to pay more than $4.3 million in restitution to the school district. Cotroneo was ordered on Monday to pay more than $3.2 million in restitution, which represented the loss to the school district while he was an active participant in the scheme.

In addition to ordering restitution, the court ordered that Cotroneo forfeit to the United States more than $9.1 million, which represented the proceeds derived from the scheme. D’Alonzo was ordered to pay more than $1.6 million in restitution and also ordered to forfeit a sum of approximately $4.3 million.

Gartland was previously ordered to forfeit $11 million, which represented the total proceeds derived from the fraudulent scheme. Prior to his sentencing on September 14, 2012, Ritacco forfeited to the United States $1 million, a 2010 Mercedes Benz, and $8,950 in cash.

In addition to the prison term and payments, Cotroneo was sentenced to serve three years of supervised release.

In a separate and unrelated scheme beginning in 2005 and continuing through 2008, Inteso accepted hundreds of thousands of dollars in payments from Gartland, an insurance broker whose companies provided insurance brokerage services for New Jersey municipal entities including the Brick Township Board of Education and the Township of Toms River.

Officials said Inteso directed Gartland to make the payments to a company Inteso controlled and that had ceased operating by 2007. Gartland pleaded guilty to charges of mail fraud, conspiracy to defraud the IRS, and perjury and was sentenced to 135 months in prison.

Inteso used the funds to pay for his personal expenses and withdrew significant amounts of cash. Despite receiving approximately $291,000 in income from the insurance broker during calendar years 2006, 2007 and 2008, Inteso failed to file personal income taxes for those years, officials said. In addition to the prison term, Inteso was sentenced to serve two years of supervised release.

Source: U.S. Attorney’s Office, District of New Jersey

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