Former School Official, Restaurateur Charged In Kickback Scheme: Feds

Garden City NY

19 May, 2022

2:38 PM

Description

HEMPSTEAD, NY — A former official of the Hempstead School District was charged today with services fraud for manipulating the district's contract process to benefit a food service provider in exchange for kickbacks. The owner of the company was also charged. Sharon Gardner, 56, of Lindenhurst, the former director of food services for the Hempstead School District (HUFSD), and Maria Caliendo, 57, of Elmont, the owner of food service provider Smart Starts NY, Inc. and Prince Umberto's restaurant in Franklin Square, were charged with conspiracy to commit honest services wire fraud. Caliendo was also charged with making false statements to a federal agent investigating the scheme. "As alleged, with little regard for the taxpaying public, the defendants secretly steered lucrative food service contracts to themselves and then illegally shared the profits," said United States Attorney Breon Peace. "This office will continue to vigorously investigate and prosecute those who attempt to corrupt our public institutions through illegal bribes and kickbacks, as well as the officials who enrich themselves at the expense of the public they serve." According to prosecutors, in her role as the director of food services for the school district, Gardner helped steer contracts to Caliendo's company in exchange for kickbacks. During the 2016-17 school year, prosecutors say Gardner convinced district officials to treat Caliendo as a sole-source vendor of breakfast foods. Sole-source vendors are usually providers of unique supplies that are hard to source. By naming her company a sole-source vendor, it avoided bidding for services. In the 2017-18 school year, Gardner oversaw budding for breakfast items, and awarded the contract to Smart Starts despite more cost-effective bids being submitted, prosecutors say. Caliendo's company received more than $1.2 million from the Hempstead School District through these contracts, prosecutors say. In exchange for the contracts, Caliendo paid Gardner more than $100,000 in kickbacks through fake payroll deposits, prosecutors say. To hide the arrangement, the payments were sent to a bank account made out in the name of one of Gardner's family members, prosecutors say. According to prosecutors, Gardner spent the money on international vacations, vehicle leases, home furnishings and more. "Instead of following the legitimate bidding process for a food services contract, the defendants allegedly used the Hempstead School District as their own piggy bank," Nassau County District Attorney Anne Donnelly said. "This prosecution sends a strong message to public officials that anyone using tax dollars to unjustly enrich themselves will be prosecuted to the fullest extent of the law." In voluntary interviews with investigators, prosecutors say Caliendo lied about the payments, claiming they were repayments for a startup loan from Gardner's family member. If convicted, both women could face up to 20 years in prison.