District: Feds Say No Current Barnegat Employees Suspected of Wrongdoing in Fraud Case

Barnegat Township School District officials said today that the FBI informed them months ago an indictment was coming for two sports equipment company executives the district did business with, but also told them federal agents had no reason to believe anyone currently on Barnegat’s payroll was guilty of any wrongdoing in the case.

that former chief executive officer of Circle Systems Alan Abeshaus, 79, of Highland Beach, Fla., and former chief financial officer Mitchell Kurlander, 52, of Allentown, Pa., directed "a long-running fraud against schools in New Jersey and elsewhere."

The company’s former president pleaded guilty to fraud charges in December 2008, admitting that his company participated in fraudulent business practices, including overcharging schools for services and not conducting safety tests on reconditioned helmets, and misreporting testing data to raise the company's profits.

At the same time, the company offered donations and gifts to athletic officials at schools across the state, including Barnegat, and used fraudulent billing practices to regain the value of the gifts, according the indictment handed down yesterday.

In February, federal agents met with Barnegat district officials to tell them that Circle Systems, which refurbished football helmets for Barnegat until the company was bought out by Schutt Group, had defrauded the district of thousands of dollars, said district business administrator Dean Allison. Years before, Allison said, the district was subpoenaed along with many others in New Jersey who contracted with Circle Systems.

But when agents paid a visit to Barnegat this year, “they were making a victim notification,” Allison said. “We were being billed twice for services, we were being billed for services not being performed."

Allison and Board of Education president Lisa Becker said agents had explained the full extent of the fraud was only evident when Circle System’s internal documents were seized. The company would take an order of helmets, refurbish the portion of them that needed fixing and then bill the district as if they’d refurbished all of them, they said.

Agents told the district they had no evidence that anyone currently working for the school district did anything wrong in the case, Allison said, and said there was little way officials could have known the fraud was taking place.

According to the indictment, between 2004 and 2006, a person or persons at the high school received a computer, camera equipment, golf gear and more from Circle Systems at the same time that the company was overcharging the district for helmet refurbishing services. (For a detailed list of the items, read .)

Becker said current athletic director John Germano started in his position in July 2006, after the gifts referenced in the indictment stopped arriving.

“Everything listed there was under the former athletic director,” Richard Kane, she said, “while the building was in start-up mode.” Germano worked for the district at the time, she said, but couldn’t even sign off on purchase orders at that point.

FBI agents told the district that athletic officials around the state may have been receiving gifts from Circle Systems, Becker said, “and whether they should have been taking gifts is another thing. But the bottom line was that Circle was committing fraud."

The district “hands down supports John Germano,” Becker said. When audits are done of Barnegat’s schools, she said, “the account has come back every time and said the best-organized department as far as financial accounting and dealing with internal and external tracking is the athletic department. He has so many control measures in place.”