Union City Inspector Garces Jailed for Rigging HUD Bids

Johnny Garces, 53, of Union City, New Jersey, is going to prison for rigging taxpayer-funded construction contracts meant to improve low-income housing and public infrastructure. The former Union City Community Development Agency (UCCDA) inspector was sentenced to 20 months in federal prison today for conspiring to defraud the U.S. Department of Housing and Urban Development (HUD), stealing at least $307,497 in grant money through a rigged bidding scheme.

Garces, who once held the public’s trust as a government inspector, admitted to orchestrating a multi-year scam from April 2007 to July 2011. Instead of ensuring fair competition for HUD-funded home improvement and sidewalk replacement projects, he colluded with contractors Joseph Lado, 68, of Fort Lee, and Leovaldo Fundora, 55, of Guttenberg, to manipulate bids. He directed them to submit false, inflated quotes from fake competitors—phantom companies that never existed—just to make their own bids look like the best deal.

The fraud was cold and calculated. Garces didn’t just alter paperwork—he built an entire shadow bidding process designed to fool auditors and bypass federal oversight. By fabricating bids from non-existent firms, he guaranteed Lado, Fundora, and their associates would win contracts they didn’t earn. The scam drained $307,497 from community development funds meant to help struggling families and crumbling urban infrastructure.

U.S. District Judge William H. Walls handed down the 20-month sentence in Newark federal court, adding three years of supervised release and ordering full restitution of $307,497. The judge made it clear: public servants who betray their duty for personal gain will pay. Garces pleaded guilty to one count of conspiring to obtain fraudulently funds provided to Union City through federal block grants.

He’s not the only one facing consequences. Joseph Lado was sentenced on August 10, 2016, to three years of probation and must repay $82,886. Leovaldo Fundora received the same probation term on August 17, 2016, and owes $73,754 in restitution. Both cooperated to varying degrees, but their names are now tied to a scandal that undermined public trust in HUD’s mission.

The investigation was led by the FBI and HUD’s Office of Inspector General, under the direction of Special Agents in Charge Timothy Gallagher and Christina Scaringi. Assistant U.S. Attorney Barbara Llanes prosecuted the case for the government. U.S. Attorney Paul J. Fishman emphasized that federal funds are not a slush fund for corrupt officials and contractors—they’re lifelines for communities that can’t afford to lose them.