Ex-UC BOE trustee, CDA employee, pleads guilty to causing $400k in losses

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A former Union City Board of Education trustee, who works for the city’s Community Development Agency, pleaded guilty to rigging the CDA contractor selection process – causing losses of at least $400,000, U.S. Attorney Paul Fishman announced. 

Photo Courtesy of RafaelMartel.com.
Photo Courtesy of RafaelMartel.com.

By John Heinis/Hudson County View

Johnny Garces, 52, of Union City, pleaded guilty today before U.S. District Judge William H. Walls in Newark federal court to an information charging him with one count of conspiring with others to fraudulently obtain funds provided by Union City, officials said.

Between April 2007 and July 2011, Garces was an inspector at the UCCDA, a government agency that receives funding from the U.S. Department of Housing and Urban Development (HUD) under a federal block grant that provides money for home improvement projects, sidewalk replacement and other projects, officials said.

From 2007 through 2011, Garces conspired with contractors Joseph Lado, 66, of Fort Lee, New Jersey, Leovaldo Fundora, 53 of Guttenberg, New Jersey, and others to rig the selection process for HUD-funded projects through false and misleading bids, authorities said.

In addition to instructing Lado and Fundora to submit phony, higher bids from competitors, Garces also fabricated higher bids from numerous fictitious companies so that Lado, Fundora and others would secure the projects, court documents show.

The conspiracy charge to which Garces pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine and he is scheduled to be sentenced on July 7, 2015.

Garces resigned from the Union City Board of Education late last year and was replaced by Alejandro “Alex” Velasquez.

Lado pleaded guilty to the scheme back on December 10, while Fundora pleaded guilty to similar charges on January 14. Neither contractor has been sentenced yet as of this writing.