A general contractor company alleges a county government agency committed fraud in a $50 million taxpayer project.
NEW BRUNSWICK -- A general contractor company alleges a county government agency committed fraud and political pay-to-play in a $50 million taxpayer project.
At the first day of trial on Monday, opening statements were heard in a case brought by Spectraserv Inc. -- a South Kearny-based construction management company -- which was awarded a contract for a large-scale public improvement project to dates back roughly 15 years. The company is suing for fraud, breach of contract, and other claims.
The company alleges that Fredrick Kurtz, a former head of the MCUA and a politically tied figure to the Middlesex County Democratic Organization, helped steer millions of dollars in funds to a company set up just a month before the project began. His daughter, Holly Kurtz Antisell, was the head of the company, described by the plaintiff's attorney as nothing more than a "bagman for her father."
"The evidence will show, Your Honor, that Mr. Kurtz created R3M Engineering and installed his daughter, Holly Kurtz Antisell, as the sole director, shareholder, and president of R3M, so he could run this project from behind the scenes and funnel money to himself," said Spectraserv's attorney, Marc D'Angiolillo.
The suit also alleges a disturbing pattern of political contributions, wielded, the plaintiff says, to influence public spending.
It was "expected and traditional" for companies like R3M to entertain commissioners of the MUA and their wives, the suit alleges.
The company alleges Kurtz created a company in 1999 called R3M Engineering to use as a "figurehead" company to funnel and profit off a patented design process developed by a company in the United Kingdom.
D'Angiolollio alleges that R3M was "retained as part of a political pay to play scheme orchestrated by Kurtz" and has been paid roughly $10 million for the project.
"Documents show that R3M was advised that political contributions were directly linked to the project," D'Angiolollio said in a statement. He added that R3M was allegedly "paying, at least, $3,000 a month in political contributions totaling over $100,000 in political contributions."
In 2003, Spectraserv was awarded an engineering contract by the MCUA to do design work on the project. Spectraserv allegedly fell behind schedule, and the MCUA ultimately terminated its contract with the company.
Spectraserv alleges that the patented design did not work as expected and there were "fires and explosions allegedly caused by defects in the design."
The defense maintained that there was no evidence to the claims of fraud and that there was no evidence to support that the design deficiencies were caused by R3M Engineering and the MCUA. The defense declined to comment after the hearing.
Spectraserv says that R3M and the MCUA then attempted to "cover up the design and engineering deficiencies and dangerous conditions" and blame the design failures on the public contractor.
Spectraserv says MCUA "improperly terminated" its contract and then "spent millions of dollars to try to correct R3M's defective design."
According to D'Angiolillo's statement, the MCUA "asserted counterclaims against Spectraserv ... seeking millions of dollars in damages."
Spencer Kent may be reached at skent@njadvancemedia.com. Follow him on Twitter @SpencerMKent. Find the Find NJ.com on Facebook.