New Jersey CEO Sent to Probation for Postal Service Scam

A high-ranking executive at a New Jersey company was convicted of a brazen scheme to defraud the U.S. Postal Service, netting a hefty profit from falsified invoices and inflated repair costs.

Cornerstone Facility Solutions, LLC (Cornerstone), a maintenance and repair service based in Brick, New Jersey, and its CEO, Paul Galgon III, paid $316,779 to resolve their False Claims Act liability for bilking the U.S. Postal Service (USPS) out of $158,380.

The scheme centered around a service agreement between Cornerstone and USPS, which required providers to report whether they self-performed or subcontracted services for repairs. If the provider subcontracts the work, they can markup the subcontractor’s cost by no more than 10 percent.

Cornerstone, however, repeatedly submitted false invoices to USPS for repair work, claiming its employees performed the work when, in fact, it was performed by subcontractors. Galgon directed Cornerstone employees to falsify subcontractor invoices to make them appear as though the work was performed by Cornerstone employees, thereby allowing the company to build in an improper 30-percent markup on the subcontractor’s costs.

The overcharging was a direct result of the scheme, which ran from July 2016 to July 2021. The resolution was the result of a coordinated effort between the U.S. Attorney’s Office for the Eastern District of Virginia and the USPS Office of Inspector General.

Galgon also pleaded guilty to one count of criminal wire fraud for the conduct covered by the civil settlement and was sentenced to three years of probation and a $5,000 fine. The civil case was handled by Assistant U.S. Attorney William Hochul III, while the criminal case was prosecuted by Assistant U.S. Attorneys Russell L. Carlberg and Kristin S. Starr.

The brazen scheme has left many in the community reeling, wondering how such a massive deception was carried out under their noses. The case serves as a stark reminder of the importance of transparency and accountability in government contracts.

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