Trio Proposes Insurance Bidding

(Reprinted from Amboy Beacon, Oct. 20, 2010)

PERTH AMBOY — An alleged scheme to bilk the Perth Amboy Board of Education

out of $2,593,400 over nearly six years for healthcare-related programs that

never existed, which has led a State Grand Jury to hand-up an indictment

charging two brokers and their companies with participating in that alleged

scheme, might have been prevented had there been public bidding on insurance

contracts.

Three Perth Amboy residents and community activists — Maria Garcia, Luis

Vargas and Harry Pozycki — appeared before the Board last week to urge its

members to seriously-consider going-out-to-bid on all future insurance

contracts.

Garcia, who chairs the Planning Board, pointed out that another school

district decided to bid its insurance contracts and saved about $6 million in

the process.

She asked the Board to “open its contracts to the competition process and

have full-disclosure of broker and consultant fees.”

Pozycki, an attorney and longtime reform advocate, offered to meet with the

Board’s professional staff and present a way to have “open insurance

competition” as developed by “school administrators, former superintendents and

government lawyers.”

“I do intend to reach-out,” Board President Samuel Lebreault declared.

Insurance brokers Francis Gartland, 69, of Baltimore, MD, and Brian Foley,

36, of Summit and two of Gartland’s companies, Gartland & Co. Inc. and

E-Administrative Systems Inc., are charged with Conspiracy, Forgery, Money

Laundering and Theft by Deception.

That indictment followed the previous arraignment of Gartland, his

son-in-law Derek Johnson, 39, of Luthersville, MD, and their business partner,

Thomas Kelleher, 52, of Parksville, MD, in connection with charges that they

bilked the City of Perth Amboy out of $216,495 for another healthcare-related

program that never existed. Two other Gartland-related companies, Federal Hill

Risk Management LLC and East Coast Administrative Services Inc., also were

indicted with those three defendants.

Another broker, Frank Cotroneo, made a surprise appearance before Superior

Court Judge Bradley Ferencz, sitting in New Brunswick, to enter a guilty

plea to accusations of False Representation for a Government Contract and Theft

by Deception before a Grand Jury review.

The maximum sentence for each charge could be a prison term of up-to 10

years and fines of up-to $5 million.

However, under a plea-agreement struck by Deputy Attorneys General Dianne

DiGiamber Deal and Pearl Minato, Cotroneo’s exposure would be limited to a

prison term of eight years, with four years of parole ineligibility. That

sentence could be reduced further to a prison term of six years, with three

years of parole ineligibility, if Cotroneo cooperates with an “ongoing

investigation,” which is not described in court documents.

Cotroneo also agreed to pay restitution of $2.6 million to the Board, along

with a Public Corruption Profiteering Penalty (PCPP) of $2.9 million.