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North Bergen housing official pleads guilty to extortion

Photo Credit: Cliffview Pilot File Photo

YOU READ IT HERE FIRST: North Bergen Housing Authority Operations Director John T. “Jack” Kennell today admitted in federal court in Newark that he extorted employees of a Rutherford maintenance contractor that did business with the agency.

Whenever he wanted the private employees to pay him off in $10 and $20 bills, all Kennell had to do was whistle, federal authorities said when they arrested him four months ago.

He was immediately suspended without pay by the NBHA.

Kennell, 49, of North Bergen, today pleaded guilty to a single count of extortion “under color of official right and by fear of economic harm.”

U.S. District Judge Jose L. Linares set sentencing for March 25, 2013.

Working with an unidentified co-conspirator who became a cooperator for the government, Kennell took cash payments ranging from $100 to $400 each from six employees, according to an FBI complaint on file in U.S. District Court. The contractor did repair and grounds maintenance for the authority, it says.

In exchange, the complaint says, Kennell got three of them additional paid vacation days, claiming they were working at the NBHA when they were actually traveling outside the country.

Kennell “had the authority to terminate the [company’s] employees working at the NBHA,” the FBI’s complaint says. If the employees “failed to pay Kennel they would be terminated” or he “would closely monitor their daily attendance in order to pressure them into making payments to him.

“These extortions typically occurred on Fridays” after the workers had collected their paychecks from the company, it says.

As a signal to one of the workers, the complaint says, Kennell indictated “that he wanted money by whistling.”

Under the NBHA’s contract with the company, workers were to get at least five paid vacation days a year. Any additional time off wasn’t compensated.

Those employees who didn’t take time off would get a week’s salary from the company.

“On many occasions,” the federal complaint says, the company “received instructions from Kennell to issue that additional paycheck,” even though certain workers weren’t entitled to it.

Between February 2008 and June 2011, the company “compensated employees for approximately 80 days of unauthorized vacation, totaling $12,498, because of Kennell’s actions,” it says. Kennell “accepted approximately $2,000 to $2,500 in payments for his official assistance in this fraud.”

Several instances are cited in the complaint — including a period of four straight years, from 2008-2011 in which one employee took time off and was paid for it on Kennell’s say-so. The worker kicked back $300-$400 to Kennel for each year, it says.

Another worker collected paychecks and cashed in vacation time, for a total of $2,300 despite being out of the country for three work weeks, federal authorities allege. Kennell pocketed $300 for the fraud, the complaint says.

In another case, records from U.S. Customs and Border Protection show that one of the workers traveled outside of the U.S. from Feb. 7-13. According to reports from NBHA’s electronic time card system, however, the worker “logged into the system at approximately 7:51 a.m. on or about February 7, 2008, but did not log out until on or about February 14, 2008″ after returning.

Federal authorities say the fraud brought the worker $400 — $100 of which was then given to Kennell.

Kennell later told the company to give the worker another weekly check for unused vacation time, the complaint says.

Working with the co-conspirator, he “also accepted cash payments of approximately $50 to $100 from an undocumented employee of [the company] for permitting that employee to twice change the alias that [the] employee was using to continue working,” the complaint says.

“Using his position of authority, as well as the threat of termination of employment, Kennell also regularly extorted the employees of [the company] — sometimes as frequently as twice a month – for cash payments in amounts ranging from $10 to $20 per employee,” it says.

The unidentified co-conspiratortold investigators that he demanded and collected some of the payments for Kennell.

He said he also was required to kick back $10 to $20 payments from his own pocket.

The housing authority paid the unnamed company $250,000 to $270,000 per year for repair maintenance and approximately $150,000 to $180,000 per year for grounds maintenance, records show.

Federal agents spoke with Kennell about two weeks before his arrest, sources told CLIFFVIEW PILOT .

He asked the NBHA for legal representation and was denied due to a lack of funds, the source said.

U.S. Attorney Paul J. Fishman special agents of the FBI the U.S. Department of Housing and Urban Development Office of Inspector General, as well as criminal investigators in his office, for the probe leading to today’s plea, which was secured by Assistant U.S. Attorney Lee M. Cortes Jr. of the U.S.
Attorney’s Office Special Prosecutions Division in Newark.

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