Charter School Official, From Point Pleasant, Indicted In $115K Fraud

EGG HARBOR TOWNSHIP, NJ — A charter school business administrator from Point Pleasant has been indicted in connection with a scheme that steered a $115,000 contract to the school's founder's company, which did not do the work it was paid to do, the state Attorney General's Office announced.

Michael Falkowski, 48, the business administrator for the Principle Academy Charter School, was indicted along with Peter Caporilli, the founder and former Board of Trustees president of the school, in the scheme that authorities say steered a contract to Caporilli’s furniture company, Pleasantville-based Modern Boat Works, state Attorney General Matthew Platkin said.

Caporilli is facing an eight-count indictment. Falkowski is facing five counts. Modern Boat Works, which also did business under the name Tidewater Workshop, was brought up on six counts, Platkin's office said.

The defendants were originally charged on Jan. 11, 2022 as part of an investigation by the Attorney General’s Office of Public Integrity and Accountability.

"These defendants used their positions of power over the spending of this charter school to fix the contract-awarding process to enrich the school board president and his business," Platkin said. "The misuse of taxpayer dollars for personal gain should not – and will not – be tolerated."

"Other contractors were never given a fair shot at winning this job, as they should have been," said Thomas Eicher, Executive Director of the Office of Public Integrity and Accountability. "And the company that did win the contract not only had a conflict of interest, but it also never followed through, preventing this school from getting what it paid for. This was a shameless swindle of public funds that also did a disservice to children."

The OPIA investigation determined the crimes allegedly occurred between August 2018 and late January 2019. The case was referred to the Attorney General’s Office in July 2019 by the state Department of Education, which suspected Caporilli, who was simultaneously president of the school board and CEO of Modern Boat Works, steered contracts for outdoor furniture and an outdoor learning center to his business.

That company received contracts from Principle Academy totaling $115,000 to build an outdoor learning center at the back of the school.

Prosecutors allege the scheme unfolded as follows:

Falkowski and Captorelli broke up the project into smaller contracts valued at $40,000.00 and $75,000.00 respectively, to evade public bidding requirements and prevent competing contractors from bidding on the first phase of the job.

The second, $75,000 phase was put out to bid in a newspaper public notice published on Nov. 5, 2018. Nine businesses reached out and expressed an interest in submitting proposals. But investigators say Falkowski did not send them the necessary paperwork to submit bids until Nov. 13, 2018. The proposals were due Nov. 16, 2018, leaving competing bidders less than three days to complete and physically deliver their bids. Ultimately, only one company submitted a bid: Modern Boat Works.

Investigators said the school also made payments to the furniture company before the school board approved spending the money.

Investigators found Modern Boat Works never completed the project as originally contracted. Caporilli allegedly approved a change order scaling back the project without changing the price. Even after the scope of the project had been reduced, the contractor allegedly failed to live up to the less-demanding terms of the deal.

The New Jersey State Police executed a search warrant on the premises of the charter school on Oct. 6, 2022. Police said their search did not find a completed "outdoor learning center” as approved by the board, but rather a haphazard collection of wooden furniture in poor condition.

Five second-degree counts were filed against all three defendants — conspiracy, theft by unlawful taking, official misconduct, false representation for a government contract, and misapplication of entrusted property. Each carries a sentence of five to 10 years behind bars and a $150,000 fine.

Caporilli and Tidewater are additionally accused of fourth-degree unlawful official business transaction where interest is involved, which carries a penalty of up to 18 months incarceration with a year of parole ineligibility, plus a $150,000 fine.

Caporilli is also accused of second-degree misconduct by a corporate official — punishable by five to 10 years in prison and a $150,000 penalty — and tampering with physical evidence, which carries up to 18 months incarceration and a $10,000 fine.