TRENTON, N.J. – A Pennsylvania man admitted to paying approximately $70,000 in cash kickbacks to former Hillsborough Township School District (HTSD) Business Administrator Aiman Mahmoud as part of a fraudulent overtime scheme undertaken by the two men in relation to a large-scale project involving the construction and upgrade of HTSD facilities, United States Attorney Robert Frazer announced today.
Kenneth Gratto, 55, of Dingman’s Ferry, Pennsylvania, pleaded guilty yesterday before U.S. District Judge Robert Kirsch to embezzling, stealing, and obtaining by fraud more than $156,000 of funds belonging to and under the care, custody and control of the HTSD, in violation of Title 18, United States Code, Section 666(a)(1)(A). According to the documents filed in this case and statements made in Court: Aiman Mahmoud, who served as the Business Administrator for the HTSD from 2008 through the end of 2021, helped oversee a multi-million dollar project involving the upgrade of existing school facilities as well as the construction of a new school building that had been greenlighted by a 2019 referendum. Mahmoud arranged for Gratto to be appointed as the site supervisor/owner’s representative to oversee aspects of the project including safety monitoring, and to assist two companies involved in implementing the goals set forth in the 2019 referendum. Gratto admitted that shortly after he was hired, he agreed to provide substantial cash kickbacks to Mahmoud in exchange for which Mahmoud approved Gratto’s time sheets which substantially exaggerated the number of overtime hours Gratto worked and for which Gratto billed at a rate of $150 per hour. Specifically, Gratto admitted that he regularly submitted time sheets claiming that he had worked more than 12 hours of overtime work on both Saturdays and Sundays throughout the latter half of 2021 even though he had not performed any work on those weekend days. After receiving his paychecks from the companies involved – who were in turn reimbursed by the HTSD for those amounts – Gratto would deposit the checks, withdraw cash in the amount of the intended kickback, and deliver that cash in an envelope at a location of Mahmoud’s choosing, typically, within Mahmoud’s unlocked school vehicle. Gratto admitted to paying Mahmoud approximately $70,000 in kickbacks generated from the fraudulently billed overtime hours. In total, Gratto admitted to embezzling approximately $156,150.00 from the HTSD with Mahmoud via the overtime billing scheme. As part of his plea agreement with the Government, Gratto agreed to forfeit this amount. The embezzlement charge is punishable by a maximum potential penalty of 10 years in prison and a maximum $250,000 fine. Sentencing is scheduled for March 4, 2027.
U.S. Attorney Frazer credited agents of the Federal Bureau of Investigation under the direction of Special Agent in Charge Stefanie Roddy in Newark; Homeland Security Investigations, under the direction of Special Agent in Charge Michael McCarthy; and the Somerset County Prosecutor’s Office, under the direction of Prosecutor John P. McDonald, with the investigation.
The government is represented by Assistant U.S. Attorney Mark J. McCarren of the Office’s Special Prosecutions Division in Newark.
The charges and allegations contained in the Indictment remain pending as to defendant Mahmoud and are merely accusations, and defendant Mahmoud is presumed innocent unless and until proven guilty. ###Defense counsel: Timothy Donahue, AFPD, Newark (for defendant Gratto)Stephen G. McCarthy, Esq., New York, NY (for defendant Mahmoud)
mahmoudgratto.indictment.pdf