Indictments leveled on Fenimore Landfill operator

MORRISTOWN - The principal operator of Fenimore Landfill in Roxbury appeared at a bail hearing in Superior Court Wednesday after a state grand jury indicted him on multiple counts of theft, money laundering and other charges relating to the environmental disaster that occurred on the site, resulting in more than $10 million in cleanup costs.

Richard Bernardi, 61, was arrested at 8:41 a.m. Wednesday at his Millstone (Monmouth County) residence and by 1:30 p.m., he was present at a bail hearing before Judge Thomas Critchley, who set bail at $150,000 with a 10 percent option.

Attorney Matthew Fredericks, who represents Bernardi and landfill owners Strategic Environmental Partners in related litigation, referred to the charges as "political retribution" by state officials including Gov. Chris Christie and Bob Martin, commissioner of the New Jersey Department of Environmental Protection, the agency that issued permits to Bernardi for his stated plan to cap the long-dormant landfill and establish a solar farm on the site.

Fredericks asked for his client to be released on his own recognizance, saying that DEP signed off on the project after many meetings and only began retaliating against him when the project failed. He also noted that a state appeals court agreed with his argument last year that DEP overstepped its authority in seizing the landfill.

"My client isn't going anywhere, my client has done absolutely nothing wrong," Fredericks said. "These charges are political retribution. It's ugly, they have absolutely no basis whatsoever, we have provided the state with ample evidence that would exculpate my client. There's absolutely nothing that is going to stick."

Bernardi, wearing a long-sleeve black sweatshirt and faded blue jeans, did not speak during or after the hearing. Fredericks said his client was ready to post bail immediately for same-day release.

According to acting Attorney General John J. Hoffman, Bernardi made several misrepresentations to secure a contract with DEP to operate the landfill and obtain a mortgage loan from the seller of the site. He also allegedly diverted more than $5 million in tipping fees — fees paid to SEP to deposit materials at the landfill — for personal and unauthorized uses, in violation of a requirement that most of the funds be held in escrow to ensure the landfill was properly closed.

Specific charges included a first-degree charge for money laundering, and second-degree charges of making false representations for a government contract, two counts of theft by deception and one count of theft of services.

Bernardi, whose wife is listed as the principal owner of SEP, also is charged with second-degree misconduct by a corporate official. The theft of service charge, according to the indictment, relates to his failure to pay more than $1.5 million in fees to an engineering firm hired for the project.

The charge of first-degree money laundering carries a sentence of 10 to 20 years in state prison and a fine of up to $500,000, plus an anti-money laundering profiteering penalty of up to $500,000. Second-degree charges carry a sentence of five to 10 years in state prison and a fine of up to $150,000. The charge of false representations for a government contract also carries an anti-corruption profiteering penalty of up to $250,000.

The charges follow a long  investigation by the Division of Criminal Justice Financial & Computer Crimes Bureau after foul-smelling and toxic hydrogen-sulfide fumes were detected at the landfill in late 2012. As the fumes grew worse, residents rallied in protest, resulting in legislation that paved the way for DEP to seize the property under emergency order in late June 2013, and begin remediation efforts.

But as the foul odors continued to sicken and anger residents, critics including the Roxbury Environmental Action Coalition and the New Jersey Sierra Club shifted much of the blame to the governor and his administration for signing off on the project in 2011.

“The real crime has been to the people of Roxbury who have suffered from years of pollution and toxic chemicals from this site," New Jersey Sierra Club director Jeff Tittel said after the hearing. "The people living around the Fenimore landfill have not only experienced toxic odors, but they have experienced significant health impacts. They have been living a toxic nightmare for more than five years. What’s happened here has also shown the failure of the government to protect the community from the impacts of this harmful site. The people and the community of Roxbury have been the real victims.”

“We’ve taken civil action on behalf of the DEP to recover millions of dollars spent to address Bernardi’s mismanagement of the landfill," Hoffman wrote in a statement announcing the indictment.. “However, Bernardi also must be held accountable criminally, because he allegedly lied repeatedly to the state and the former owner of this landfill so that he could reap millions in tipping fees, while nearby residents and the environment suffered.  Bernardi falsely represented this project from the start, and the neighbors of Fenimore paid the price by breathing the foul odors emitted as this landfill remained uncapped.”

“Bernardi allegedly told lie upon lie, misrepresenting SEP’s finances, his ability to properly close this landfill, and his prospects for generating and selling solar power,” said Elie Honig, director of the Division of Criminal Justice. “He allegedly lied to buy the land with a favorable loan from the seller and to induce DEP into approving his plan to operate the site; then he enriched himself and his family by diverting funds that were supposed to be held in escrow to ensure environmental issues were addressed.”

Hoffman's statement further alleged that Bernardi’s proposal to generate millions of dollars in revenue by building a 10 megawatt power facility was based on misrepresentations and, because SEP already had accrued several million dollars in debt, the defendants were not financially positioned to complete the major task of closing the landfill.

According to Hoffman, as part of the project, the DEP authorized SEP to import about 1.2 million cubic yards of materials, which would generate tipping fees. SEP was required under the DEP authorization to deposit all but $650,000 of those fees into an escrow account and to obtain DEP approval to withdraw escrow funds for operating expenses at the landfill. SEP had to retain a minimum of 15 percent of the tipping fees for landfill closure costs.

But while SEP collected roughly $5.5 million in tipping fees, according to Hoffman, it deposited only $250 into the escrow account and withdrew $150 of that money without DEP approval. Bernardi and SEP allegedly diverted the rest of the funds without permission, including more than $1.6 million that was diverted into personal accounts of Bernardi, his family and a family friend.

Deputy Attorney General Thomas R. Clark presented the indictment to the state grand jury for the Division of Criminal Justice Financial & Computer Crimes Bureau, and also represented the state at the bail hearing. He declined comment after the proceedings.

DEP officials referred questions back to the attorney general. Roxbury Manager Chris Raths, speaking for the township administration, said "We will let the indictment speak for itself.

Staff Writer William Westhoven: 973-917-9242; wwesthoven@GannettNJ.com.