Opinion ID: 3013312
Heading Depth: 2
Heading Rank: 2

Heading: The Contracts-for-Payments Scheme

Text: In early 1994, CMSI, a company seeking to provide various services to Passaic County, hired Angelo Joseph “Buddy” Fortunato, a former State Assemblyman who had known Murphy’s father, to assist in obtaining County contracts.2 Prior to that time, CMSI held no contracts with 1. Prior to the commencement of Murphy’s trial, DiDonna pleaded guilty to two counts of conspiracy to commit mail fraud. In return for his testimony against Murphy, DiDonna received a reduced sentence of 4 months incarceration. 2. Fortunato pleaded guilty to one count of conspiracy to commit mail fraud. Like DiDonna, in return for testifying against Murphy, Fortunato received a reduced sentence of 3 years of probation. 7 the County. Fortunato organized a meeting in February 1994 at Anthony’s, a restaurant owned by Murphy in Totowa, New Jersey, at which Fortunato informed Murphy of CMSI’s interest in doing business with the County, and Murphy expressed interest in the idea. Murphy arranged a follow-up meeting at his restaurant among the principals of CMSI, Robert Jorgensen and Matthew Burstine, Fortunato, Albert C. Lisbona (a mutual friend of Murphy and Fortunato), County Administrator DiDonna, and himself to see what types of contracts the County could award CMSI. At that meeting, Jorgensen and Burstine proposed that CMSI manage the County’s workers’ compensation claims, and stated that they could save the County about a million dollars from a reduction in abuse of the system. Approximately a week later, Murphy spoke again with Fortunato, Jorgensen, and Burstine when they were dining at his restaurant. In response to Murphy’s complaint that people were always pestering him for jobs, Burstine suggested that he could help Murphy by creating a four person “Panel” to advise CMSI. Murphy responded favorably and proposed that the Panel be funded with a portion of the proceeds from any contracts CMSI entered into with the County. In order to pay the Panel the desired sum of $100,000, Burstine and Murphy determined that about $1,000,000 in County contracts would be necessary, which Murphy would help to procure. Shortly thereafter, Murphy provided Fortunato with a list of four persons to serve as Panel members and the amounts that each should be paid, which Fortunato relayed to Burstine at CMSI. Murphy chose Curt Masklee, his best friend and business partner; John Bonazzi, an undersheriff in the Passaic County Sheriff ’s Department; Joseph DiDonna, County Administrator DiDonna’s father; and Joseph DiPasquale, a member of the State Waterfront Commission to whom Murphy owed a political favor, to serve as Panel members. There was circumstantial evidence presented at trial that Murphy received a portion of Masklee’s payments as a kick-back, and that DiDonna took a piece of his father’s proceeds. Murphy then began to put pressure on DiDonna to award CMSI a County contract. When it became apparent that a 8 workers’ compensation contract would not be available, Murphy pressed DiDonna to aid CMSI in bidding for a third party administration (“TPA”) contract at the County jail, regardless of CMSI’s lack of experience in this field. DiDonna aided CMSI throughout the bidding process and, notably, allowed it secretly to resubmit a bid after the submission period expired because CMSI had previously filed a bid that was considerably higher than those of its competitors. DiDonna then recommended the CMSI bid to the Board of Freeholders, while Murphy talked to several of the Freeholders about the contract. On July 20, 1994, the Board of Freeholders awarded the TPA contract to CMSI at its revised bid of $165,000. A short time after the contract was awarded to CMSI, the Panel members had not yet received any payment. This upset Murphy, who relayed his concern to Fortunato. Fortunato explained that CMSI could not fulfill its obligation under the scheme unless it received advance payment on the TPA contract. Murphy contacted DiDonna, who made three months’ worth of advance payment on the contract even though it had been in effect for only two weeks. In September 1994, the Panel met for the sole purpose of receiving their checks according to the amounts specified by Murphy. In order to conceal the operation, the Panel members were paid by a shell corporation established by Jorgensen and Burstine, called Physician’s Management, and were instructed to pay taxes on the payments so that the Panel appeared legitimate. This pattern continued: Murphy would pressure DiDonna to ensure that CMSI was paid by the County, and Murphy would press Jorgensen and Burstine at CMSI to call another Panel meeting to distribute payments. No actual work was ever done by the Panel members, who did not have relevant expertise and provided no business advice or guidance to CMSI. Murphy was aware that the Panel members were being paid despite the fact that they did no work. In order to continue the operation, Murphy, Jorgensen, and Burstine worked with DiDonna to find more County contracts that could be awarded to CMSI. Over the next year, DiDonna helped CMSI receive three more County contracts: $39,625 for arranging drug and alcohol testing 9 for operators of large trucks and heavy machinery; $173,250 to renew the TPA contract; and $624,000 to provide nursing services at the Passaic County Jail. The scheme began to unravel in May 1996 when DiDonna became nervous about being pressured to find even more contracts for CMSI and the possibility that his father could be harmed if the scheme were exposed. Shortly thereafter, two of the Panel members, Joseph DiDonna and Curt Masklee, wrote letters of resignation. In June and July of 1996, the United States Attorney’s Office approached Burstine and Jorgensen and let them know that the scheme had been uncovered. Although they both agreed to cooperate with the Government’s investigation, Burstine tipped off Fortunato, Lisbona, DiDonna, and Murphy about the federal investigation and the possibility that CMSI’s phones might be tapped. Nevertheless, the Government managed to record Jorgensen and Burstine’s telephone conversations and tape meetings during the next two years in order to develop evidence presented at trial, including a conversation between Fortunato and Jorgensen in which Fortunato described the entire history of the scheme. No further payments were made to the Panel nor contracts awarded to CMSI after the Government’s investigation was exposed in July 1996. In total, the Panel members shared $72,879.25, which was derived from $1,207,199 in County contracts awarded to CMSI.