Gordon D. McDonald, 55, Charged in Massive Conspiracy Scandal

A grand jury in Newark indicted Gordon D. McDonald, 55, a former project manager for a prime contractor, for his involvement in two separate kickback and fraud conspiracies at a U.S. Environmental Protection Agency (EPA)-designated Superfund site in Manville, New Jersey.

The indictment, originally filed under seal on Aug. 31, 2009, charges McDonald with engaging in kickback and fraud conspiracies with sub-contractors John A. Bennett and James E. Haas Jr. at Federal Creosote. McDonald was arrested on Sept. 8, 2009, in Berlin, New Jersey, while Bennett was arrested in Vincentown, New Jersey, on Sept. 10, 2009.

According to the indictment, McDonald accepted kickbacks from Bennett, Haas, and another sub-contractor in exchange for the award of sub-contracts at Federal Creosote. The indictment also alleges that McDonald provided Bennett and his co-conspirators with the bid prices of their competitors, allowing them to submit the highest possible bid prices and still be awarded the sub-contracts.

The conspiracy schemes took place at different time periods from approximately December 2000 until approximately April 2007. The clean-up at the Federal Creosote site is partly funded by the EPA. Under an interagency agreement between the EPA and the U.S. Army Corps of Engineers, prime contractors oversaw the removal, treatment, and disposal of contaminated soil, as well as other operations at the Federal Creosote site.

McDonald is also charged with participating in a bid-rigging conspiracy and separate kickback and fraud conspiracies at Federal Creosote and Diamond Alkali, another EPA-designated Superfund site in Newark, New Jersey. He is also charged with one count of international money laundering, two tax violations, and obstruction of justice.

The charges announced today resulted from an ongoing investigation conducted by the Antitrust Division’s New York Field Office, the EPA Office of Inspector General, and the Internal Revenue Service Criminal Investigation. Seven individuals and three companies have already pleaded guilty as part of this investigation.

The 12-count indictment carries a maximum penalty of five years in prison, three years of supervised release, and a $250,000 fine. McDonald, a former project manager, is currently facing serious charges and a lengthy prison sentence if convicted.

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