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Federal agents arrest, charge North Bergen Housing Authority operations director

Photo Credit: NBHA

YOU READ IT HERE FIRST: Whenever he wanted a Rutherford contractor’s employees to pay him off in $10 and $20 bills, all John T. “Jack” Kennell of the North Bergen Housing Authority had to do was whistle, federal authorities said.


A federal judge this afternoon freed Kennell, 49, on a $50,000 unsecured bond, under the supervision of Pre-Trial services after agents arrested the authority’s di rector of operations this morning on extortion charges.

He was also ordered not to leave the state.

Working with an unidentified co-conspirator who is now cooperating with the government, Kennell took cash payments ranging from $100 to $400 each from six employees, a ccording 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.”

“The North Bergen Housing Authority learned of Mr. Kennell’s arrest this morning,” NBHA Executive Director Diane Peirano-Ingvaldsen said in a statement issued just after 11 a.m. “He has been suspended without pay, effective immediately.  We take this matter very seriously and are fully cooperating with the investigation.”

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, they’d 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 then told the company in September 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-conspirator, who is cooperating with the government, told 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 ago, a source with direct knowledge of the arrest told CLIFFVIEW PILOT .

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

Rumors about the housing authority have swirled for some time.

Agents from both the federal and state levels “have consistently been in town,” one source said.

Kennell is officially charged with “obstructing and affecting commerce by extortion under color of official right and induced by fear of economic harm.”

U.S. Attorney Paul J. Fishman credited special agents of the FBI and the Department of Housing and Urban Development Office of Inspector General, as well as criminal investigators from his office, with the probe that led to this morning’s arrest.

Fishman also noted that the investigation is continuing, led by Assistant U.S. Attorney Lee M. Cortes Jr. of the Special Prosecutions Division in Newark.


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