LEGAL NEWSLINE

TRENTON, N.J. (Legal Newsline) - New Jersey Attorney General Jeffrey Chiesa announced a settlement Monday with Birdsall Services Group to resolve a civil forfeiture action the state filed against the company.

The settlement does not resolve charges in a pending criminal indictment against Birdsall and seven former and current executives. The indictment alleges the defendants made illegal corporate political contributions through employees to evade the state's pay-to-play law. The settlement resolves the civil action and the bankruptcy petition subsequently filed by Birdsall.

"Through this settlement, the state has gained a substantial sum in civil forfeiture from Birdsall and has secured its right to seek significant additional criminal penalties," Chiesa said. "At the same time, Birdsall can continue to operate, to perform its contracts and to pay its employees. Our goal has consistently been to punish the guilty and protect the state's interests, without needlessly harming innocent employees or those doing business with the firm."

Under the terms of the settlement, Birdsall must pay the state $2.6 million to settle the civil forfeiture action and set up a $1 million fund dedicated to paying fines, penalties and restitution that may arise from the ongoing criminal action. Birdsall will fund most of the payments by drawing on the cash surrender value of certain life insurance policies it holds on its former officers and current officers, many of whom were indicted. The rest of the payments will be paid from cash on hand.

Chiesa's office obtained an indictment on March 26 against Howard Birdsall, the largest shareholder and former CEO of Birdsall Services Group, and six other executives and shareholders. The defendants allegedly conspired to avoid New Jersey's Pay-to-Play Act by disguising illegal corporate political contributions as personal contributions from employees of the firm. The scheme allegedly went on for more than six years and resulted in hundreds of thousands of dollars in contributions.

The defendants face allegations of first-degree conspiracy and money laundering, in addition to other charges, which could carry sentences of 10 to 20 years of prison and fines and penalties of up to $1 million.