The former head of the now-defunct Paterson Municipal Utilities Authority on Wednesday admitted to accepting kickbacks from contractors in two schemes, according to U.S. Attorney Craig Carpenito.
Erik Lowe, 50, of Paterson, pleaded guilty to conspiring to commit extortion and extortion under color of official right.
The kickback schemes involved $288,200. In the first scheme Lowe issued $146,500 in sham payments, issued via check following the agency’s dissolution, to Carnell Baskerville, 51, a self-employed contractor, between Dec. 2014 and May 2015.
Baskerville is the owner of Carnell’s General Contracting of Linden. Both agreed to a kickback scheme, where Lowe would write checks for service rendered that was never performed to Baskerville’s company, those checks would then be divided up between both parties.
Baskerville pleaded guilty in Feb. 2018. He is scheduled to be sentenced on Sept. 6, 2018, said authorities.
Lowe’s wasn’t the only beneficiary. Authorities on Wednesday said another “fellow MUA commissioner” received cash for helping to carry out the scheme.
The second commissioner has not been named by authorities.
Authorities revealed Lowe was involved in another similar scheme with a second contractor, whose company installed and repaired fences for residential and commercial businesses, from Aug. 2012 through Nov. 2014.
Lowe admitted he inflated the checks paid to the second contractor above the value of job performed so the contractor could kickback “thousands of dollars” to him. Near the end of the scheme, Lowe was issuing checks for thousands of dollars knowing that no job had been performed by the contractor.
Lowe issued $141,700 in checks to the second contractor and accepted “tens of thousands” in kickbacks, said authorities.
Lowe faces 20 years in prison and $250,000 in fine for each of the two counts. He is scheduled for sentencing on Sept. 11, 2018.
Lowe served on the MUA from Feb. 2009 through May 2015. The agency was dissolved in Oct. 2014. Lowe continued to write checks from the agency’s bank account.
The Municipal Utilities Authority (MUA) was created in 1981 to manage the hydro electric plant at the foot of the Great Falls and to care for the surrounding park land.
An audit in 2015 uncovered payments were being made from the agency’s bank account long after it was dissolved. Municipal officials referred the matter to the Passaic County Prosecutor’s Office for an investigation which did not take any actions.