Former Elizabeth, New Jersey Equipment Manager Admits Fraud Against Elizabeth Schools

NEWARK—Former Elizabeth Public Schools Equipment Manager Robert Firestone admitted today that he conspired to defraud the school system through fraudulent business practices for his personal gain, U.S. Attorney Paul J. Fishman announced.

Firestone, 64, of Clark, N.J., pleaded guilty to an Information charging him with one count of conspiracy to commit mail fraud. He entered his guilty plea before U.S. District Judge Dickinson R. Debevoise in Newark federal court and was released on a $50,000 bond.

According to the documents filed in this case and statements made in court:

Firestone, who was employed as Equipment Manager for Elizabeth Public Schools (“Elizabeth”) from at least February 2006 to April 2007, admitted that during this time, he conspired with employees from Circle Systems Group, Inc. (“Circle”)—a company that was in the business of selling and conditioning athletic equipment, uniforms and apparel—to commit fraud relating to Elizabeth’s purchasing of Circle’s services.

Firestone also admitted that, on several occasions, he approved fraudulent invoices submitted by Circle to Elizabeth for payment, knowing that Circle had not performed the full amount of the billed services. Once Elizabeth paid an invoice, Circle officials advised Firestone that the school district maintained an internal credit with Circle. Firestone stated that, on certain occasions, he requested that Circle use portions of the schools’ credit to purchase merchandise for his personal benefit. During the course of the conspiracy, Firestone received more than $7,000 in personal goods and merchandise, including electronic equipment such as a flat-screen TV, a Bose radio system and a digital camera—as well as various articles of clothing and athletic apparel. The items were paid from Elizabeth’s credit with Circle that was created through the fraudulent invoices paid by the district.

The case against Firestone is part of the ongoing investigation into Circle’s business practices conducted by the FBI and the U.S. Department of Education Office of Inspector General. On Dec. 22, 2008, former Circle president David Drill pleaded guilty to conspiring to defraud various New Jersey schools. On Dec.16, 2010, former Long Branch High School athletic director Charles Ferrara, Jr., pleaded guilty to conspiring to defraud Long Branch High School in a similar manner. Both Drill and Ferrara await sentencing.

The charge to which Firestone pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for April 18, 2011.

U.S. Attorney Fishman credited special agents of the U.S. Department of Education Office of Inspector General, under the direction of Special Agent in Charge Brian Hickey; and special agents of the FBI in Newark, under the direction of Special Agent in Charge Michael B. Ward, with the investigation.

The government is represented by Assistant U.S. Attorney Christopher J. Gramiccioni of the U.S. Attorney’s Office Special Prosecutions Division and Senior Litigation Counsel John M. Fietkiewicz of the Office’s Criminal Division.

Defense counsel: Wanda M. Akin, Esq., Newark, N.J.