NEWARK, N.J. (Essex County) – A Pennsylvania man employed as a regional manager for a contractor involved with construction projects at Picatinny Arsenal and at Joint Base McGuire-Dix- Lakehurst admitted Tuesday his role in a fraud scheme that caused losses of $1.4 million, U.S. Attorney Paul J. Fishman said.
James Conway, 45, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of wire fraud and one count of accepting unlawful kickbacks, Fishman said.
Between September 2009 and August 2015,Conway secretly owned a company called Walsh Construction Services, LLC (Walsh Construction), which purported to provide construction services. Using his position as regional manager for a construction contractor, Conway steered subcontracts to Walsh Construction for jobs at PICA and Ft. Dix. To conceal his ownership of Walsh Construction, Conway signed the subcontracts as Keith Walsh, the purported owner or vice president of Walsh Construction. There was, in fact, no person by that name who owned or was the vice president of Walsh Construction, according to court documents.
Conway used Walsh Construction to obtain payments from the construction contractor by submitting invoices and bills on behalf of Walsh Construction for work purportedly performed at Picatinny and Joint Base McGuire. Many of the invoices and bills included charges for work that Walsh Construction only partially did, or for work that was not performed at all by Walsh Construction, causing losses of $1.4 million, court documents said.
Conway also accepted kickbacks totaling $180,345, from four subcontractors who served as subcontractors to the contractor on various construction projects at Picatinny and Joint Base McGuire knowing that the subcontractors expected, in return, to obtain favorable treatment from Conway, court documents said.
The wire fraud charge to which Conway pleaded guilty carries a maximum potential penalty of 20 years in prison. The charge for accepting unlawful kickbacks to which Conway pleaded guilty carries a maximum potential penalty of 10 years in prison. Both charges carry a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greatest.
Sentencing is scheduled for Nov. 30, 2016.