Former Superintendent of Toms River Regional School District Pleads Guilty to Corruption and Tax Fraud Charges

TRENTON—The former superintendent for the Toms River Regional School District today admitted taking bribes to influence school district insurance contracts, U.S. Attorney Paul J. Fishman announced.

Michael J. Ritacco, 64, of Seaside Park, New Jersey, pleaded guilty today before U.S. District Judge Joel A. Pisano in Trenton federal court to a superseding indictment charging him with mail fraud and conspiracy to defraud the IRS.

“Ritacco betrayed the students, parents, teachers, and taxpayers of the Toms River Regional School District by soliciting and receiving more than $1 million in bribes over a long period of time. This conduct strikes at the core of our trust in government and is intolerable, and today’s plea is another affirmative step in federal law enforcement’s efforts to ensure that the local government insurance brokerage business in the state of New Jersey is conducted free from corruption and fraud,” stated U.S. Attorney Fishman.

“Michael Ritacco was entrusted by the public to oversee and administer one of New Jersey’s largest school districts and consequently to help oversee the education and welfare of the community’s children,” said Michael B. Ward, Special Agent In Charge of the FBI’s Newark Division. “Instead of embracing this responsibility, he instead chose to leverage his position to engage in illegal activity in which he received cash and benefits in excess of $1 million. It is yet another example of a community leader placing self-interest above those he represents.”

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

From 2002 to April 2010, Ritacco accepted between $1 million and $2 million in bribes and other benefits from co-schemers Francis X. Gartland, 70, the former insurance broker for the Toms River Regional School District; Frank D’Alonzo, 54, a former administrator at the Toms River Regional School District; Frank Cotroneo, 61, an insurance broker; and others. The bribes and other benefits were made in return for Ritacco’s official assistance to Gartland and other co-schemers in obtaining and maintaining insurance business with the Toms River Regional School District. Ritacco also admitted that in 2002, he, Gartland, Cotroneo, and D’Alonzo agreed to have Ritacco approve a workers’ compensation insurance contract between Gartland and the school district, which yielded approximately $500,000 to $600,000 annually in excess fees, with such proceeds to be used to make hundreds of thousands of dollars in bribes to Ritacco.

To conceal this fraudulent scheme from the Toms River Regional School District Board, as well as from the IRS, Ritacco and his co-schemers agreed to use middlemen, shell companies, sham consulting contracts, and third party payments to secretly pass hundreds of thousands of dollars in cash bribes and other payments to Ritacco.

Ritacco also admitted to filing fraudulent tax returns for tax years 2004 through 2006 and to conspiring with Gartland to evade Ritacco’s federal income taxes from approximately 2002 to 2010.

The mail fraud count to which Ritacco pleaded guilty is punishable by up to 20 years in prison. The conspiracy count to which Ritacco pleaded guilty is punishable by up to five years in prison. Both counts are also punishable by fines of the greater of $250,000 or twice the amount of loss or gain. Sentencing is scheduled for July 12, 2012.

Gartland pleaded guilty on April 2, 2012 to charges of mail fraud, separate conspiracies to defraud the IRS and the United States government, and perjury. His sentencing is scheduled for July 9, 2012.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Ward, and IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge JoAnn Zuniga, for the investigation leading to today’s plea.

The government is represented by Assistant U.S. Attorneys Dustin Chao, Harvey Bartle, and Lee M. Cortes, Jr. of the U.S. Attorney’s Office Special Prosecutions Division.

Defense counsel:

Jerome A. Ballarotto, Esq., Trenton, New Jersey

William J. Hughes, Esq., Atlantic City, New Jersey