Contractor Must Pay $156K Restitution To Hillsborough Schools In Theft Case

HILLSBOROUGH, NJ — A former contractor of the Hillsborough Township School District, Kenneth Gratto has pleaded guilty in federal court and must pay $156,150 in restitution.

Superintendent Mike Volpe and Board President Joel Davis said Gratto pleaded guilty on Thursday in the U.S. District Court for the District of New Jersey to Count 6 of an indictment charging him with theft and embezzlement.

According to the district letter, Gratto admitted under his plea agreement to participating in a scheme between January 2021 and January 2022 involving fraudulent overtime payments and kickbacks.

The restitution is intended to compensate the community for financial losses tied to the scheme, said Volpe.

District leaders said the conduct predates the current administration and board leadership.

"While these fraudulent schemes began long before my tenure as Superintendent, taking accountability and restoring complete integrity to our financial management has been my top priority since taking this role," Volpe stated.

The case is part of a broader federal investigation involving former district officials and external contractors.

Former Director of Buildings and Grounds Anthony DeLuca previously pleaded guilty in federal court for his role in an illegal overtime scheme after receiving more than $137,000 in unauthorized overtime pay and paying cash kickbacks to secure approvals.

Former Business Administrator Aiman Mahmoud was also previously indicted by a federal grand jury on charges including conspiracy to commit extortion and embezzlement.

"Our community's tax dollars belong in our classrooms supporting our students and educators, not in the hands of individuals who abuse the public trust," said Volpe. "We are pleased that restitution will eventually be returned to Hillsborough Public Schools, and we remain steadfast in enforcing strict financial controls, oversight, and ethical standards across all of our district's operations."

The district said it remains focused on school operations and on maintaining transparent and accountable financial controls as the federal case continues.

• Previous reporting: Ex-Hillsborough School Business Administrator Indicted In Kickback Scheme

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