Contractor pleads guilty to causing $40,000 in losses for Union City CDA

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A Jersey City contractor has pleaded guilty to rigging the contractor selection process of the Union City Community Development Agency and causing losses of at least $40,000, U.S. Attorney Paul Fishman announced. 

Union City CDA

By John Heinis/Hudson County View

Stanley Parzych, 62, of Jersey City, pleaded guilty to one count of conspiring with agents of a local government agency to obtain by fraud funds provided by Union City.

Parzych entered his guilty plea before U.S. District Judge William H. Walls in Newark federal court yesterday.

Between June 2007 and November 2010, Parzych owned American Construction, a company located in Jersey City.

During that same time period, there was another contractor named Joseph Lado (Lado) who owned a construction company in Union City called Lado Construction LLC.

Lado pleaded guilty to rigging $70,000 worth of Union City CDA contracts back in December.

There was also an individual, identified as Inspector 1, at the Union City CDA – a government agency that receives funds from the U.S. Department of Housing and Urban Development (HUD) under a federal block grant, officials said.

The federal grant provides funding for home improvement and sidewalk replacement projects, among other things.

Parzych conspired with Lado and Inspector 1 to rig the competitive process to perform sidewalk replacement projects and residential rehabilitation projects in favor of certain contractors, including Lado Construction, by submitting false and materially misleading proposals, authorities said.

Allegedly, on many occasions, Parzych provided Lado with phony proposals from American Construction that were higher than Lado’s proposals.

Sometimes he provided Lado with blank proposal forms from American Construction, which Lado later completed listing amounts that were higher than Lado Construction’s proposals for the same work, according to court documents.

Under both of those scenarios, Lado would then submit American Construction’s phony higher-priced proposals and Lado’s own proposals to the Union City CDA in order to obtain projects, and ultimately, HUD grant funds, from the city agency for the completion of the projects, officials said.

The conspiracy charge to which Parzych pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Additionally, his sentencing is scheduled for October 7.

Parzych is the fourth man to plead guilty in the FBI’s probe of the Union City CDA, with contractor Leovaldo Fundora pleading guilty to causing the agency $120,000 in losses back in January and former Union City CDA/ Board of Education Trustee Johnny Garces admitting to causing the agency over $400,000 in losses in March.

Hudson County View exclusively reported last week that the city of Union City was “reorganizing” the Community Development Agency based on a memo sent to employees.

A sign on the Union City CDA office last Monday, located on the fourth floor of city hall, read:

“For CDA parking lots [sic] payment(s), RURA, or anything related to CDA please contact Kennedy NG in [sic] the second floor.”

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