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Hudson County Corruption in the Kenny Era – Investigation Of The Hudson County Mosquito Extermination Commission
Accounts Analyzed

Hudson County Politics

Mr. Cayson, an SCI special agent-accountant, analyzed (1) the secret account, (2) the capital improvement account, and (3) the general operating account of the H. C. M. E. C., and the disbursements from each. The questioning starts when Mr. Cayson was asked to detail disbursements from the $155,000 secret account.

Q. Did you conduct an investigation to determine where that money went, that $155,000?
A. Yes, we did.

Q. Would you explain, please, the disbursements from that account covering that sum of money?

A. Yes. We found that the Eastern Supply Company was paid two checks, one for $13,500 and one for $15,660.

Q. Did you ever examine any documents to support that transaction?
A. Yes, sir, we did.

Q. Were they provided to you by the Mosquito Commission?
A. No, no, sir, they were not.

Q. Where did you get the documents?
A. In general, we got the documents from the suppliers, the alleged suppliers.

Q. I'm directing my question, now, to the Eastern Supply Company.
A. Yes.

Q. Where did you get the documents to explain the payment o f $29,160 to Eastern Supply Company?
A. From Mr. Milton Reid.

Q. Did you attempt to get the supporting documents from. Harry Callari?
A. He had no documents, sir.

Q. Were these the documents that disappeared?
A. Yes, sir, that's right.

Q. All right. What did the documents show?
A. In regard to Eastern Supply?

Q. Eastern Supply.
A. In regard to Eastern Supply, it was ascertained that one check for $13,500 was allegedly spent for spraying of the Secaucus meadows by helicopter.

Q. This thirteen-thousand-some-odd dollars was paid to Eastern Supply for spraying?
A. That's right, yes.

Q. Did Eastern Supply, according to its records, actually do the spraying itself?
A. No, sir, it did not.

Q. Did they hire someone else to do it?
A. They did, yes.

Q. According to their records what did it cost them to hire someone to do it?
A. $2,700.

Q. Yet they were paid in excess of $13,000?
A. That's correct, yes, sir.

Q. Now, what was the other check made payable to Eastern Supply?
A. That was for some spraying material. It's Baytex, some sort of chemical with the trade name of Baytex. It is particularly effective, I understand, in this type of work.

. . .

Q. Sorry, Mr. Cayson. You were explaining the –
A. Yes.

Q. – purchase of Baytex?
A. That's right. And we found here that $15,660 was paid for the Baytex. 24,000 pounds was supposed to be delivered. There was actually a delivery of only 20,000 pounds, that is, the Mosquito Commission was shortshipped, as we call it, 4,000 pounds and the supplier was paid some $5,850.

Q. What did the Mosquito Commission pay for this material?
A. $15,660.

Q. What did it cost Eastern Supply?
A. $5,050.

Q. All right. Lehigh Truck.
A. In regard to Lehigh Truck, sir, there will be other testimony later in regard to that. I can only say for now that we examined the books and records of Lehigh Truck, and their gross receipts in the past two or three years does not exceed $4,000, which will obviously, to my mind, indicate that they never got $28,104.

Q. Royal Mart.
A. In regard to Royal Mart, we find that this is the one legitimate transaction in this whole schedule. It refers to some dehumidifiers which were delivered to the Mosquito Control Commission.

Q. That's $437?
A. That's correct, yes.

Q. D. T. Rossillo Trucking.
A. D. T. Rossillo is a trucking company which has done substantial sub-contracting work for Benron, and again I would care not to make any further elaborations at this time.

Q. How about United Marine Construction?
A. United Marine Construction is a company which was formed one month before they received a contract from the Hudson County Mosquito Extermination Commission. We have found upon examination of United Marine's books that they have three executive officers and one employee and 100% of their funds are received from the Mosquito Control Commission.

Q. Damar Salvage & Hauling; they received $60,000 I see here?
A. That's right. Damar Salvage & Hauling, as far as our investigation can determine, was used merely as a conduit of funds for money emanating from the corporation that allegedly operated an illegal dumping site in Hudson County.

Q. What's that corporation?
A. The Duncan Land Reclamation Company.

. . .

Q. Directing your attention, to the payment of $60,000 to Damar Salvage & Hauling, were any interviews conducted of any of the corporate officers of Damar Salvage & Hauling to determine what that $60,000 was for and where it went?
A. Yes, sir.

Q. Briefly, would you relate the details?
A. Without going into extreme detail, in regard to the $60,000 the procedure would be-was that these checks and others would be taken to a particular bank. The checks were cashed.

Q. By whom?
A. By a gentleman by the name of John Marcillio.

Q. Was he interviewed?
A. He was, yes, sir.

Q. What did he say.?
A. He said that he took these and other cheeks to a particular bank and the checks were cashed.

Q. Who cashed then?
A. He did.

Q. What did he do with the cash?
A. He gave it to a gentleman by the name of James Ruffo.

Q. Or is that Joseph Ruffo?
A. I'm sorry. Joseph Ruffo.

Q. Did he tell you what Ruffo did with the money?
A. Yes. The only thing he said, that lie would see Mr. Ruffo then take the money down to the address of the Hudson County Mosquito Commission on Duncan Avenue.

Q. Did he say he saw him go into the building with the money?
A. He did.

Q. Where was he at this time?
A. He was on the dump site on Duncan Avenue.

Q. Where is that in relation to the Mosquito Commission building?
A. Approximately one-half mile up from the building.

Q. Ralph Grasso, I see, received $3,000. Who is Ralph Grasso.
A. Ralph Grasso is the county engineer assigned to the Hudson County Mosquito Control Commission.

Q. Were you able to determine why he received $3,000?
A. No, sir, I don't. No, I did not, no, sir.

Q. Mr. Cayson, what percentage of the total expenditures does your investigation classify or– no. Strike that, please.

Q. What percentage of the total expenditures of this Josquito Con mission would you classify as questionable in nature as a result of your investigation?
A. Of the secret account, sir?

Q. Yes.
A. 99.3 %.

Q. Did you make a similar percentage determination in regard to the known and existing special account for capital improvements?
A. Yes, sir.

Q. What is your opinion on that?
A. «-e find 72;c of expenditures were of a questionable nature.

Q. What's the basis for this opinion, sir?
A. Well, we have found, for instance, that the bulk of the work was done by certain companies. These companies are as follows : Meadow land Contractors of which one Mario Gallo, until he died last year, was the president; Cityline Contractors; D. T. Rossillo; Benron; Emory, and Bellezza Brothers.

Q. Do you know who the principal officers of Einory are?
A. Yes, sir.

Q. Who are they?
A. Ben and Ronnie Callari. They own all the stock.

Q. Would you repeat that answer, Mr. Cayson? I didn't hear you.
A. Benjamin and Ronnie Callari own all the stock of it.

Q. Are they related to Mr. Callari of the Mosquito Control Corn mission?
A. Yes, sir, they are.

Q. What are they?
A. They are his sons.

Q. Continue.
A. Yes. We found that the principal contractors employed by the Hudson County Mosquito Commission paid Benron substantial sums of money as follows: City Line, $20,580; Meadowla.nd, S49,850.

Q. And again to recap, who are the principal stockholders of Benron?
A. Ben and Ronnie Callari.

Q. What was questionable about the Emory transactions?
A. Well, the Emory transactions we find as follows that a company by the name of Bellezza, which had a contract with the Hudson County Mosquito Commission, paid Emory $53,990 and Meadowland, Mr. Mario Gallo's firm, paid $30,000. We found that the Hudson County Mosquito Extermination Commission also paid $28,985 and $9,870 directly to Emory.

Q. Have you made a determination as to how much money was withdrawn from the Benron Corporation by Callari or his relatives?
A. Yes, sir.

Q. How much?
A. $40,770.

Q. Over what time period is this, Mr. Cayson?
A. This is approximately two and a half years.

Q. How about Emory?
A. $76,818.

Q. Over what period of time?
A. Approximately three years ; three, three and a half years.

Q. To your knowledge do either the Benron Corporation or the Emory Construction Company own any heavy consruction equipment?
A. As far as the records I received from their particular accountants, they have none, no.

Q. What equipment do they own, if any?
A. They have three automobiles.

Q. What's the value of the automobiles?
A. $9,830.

Q. Has Emory ever received a major contract from the Hudson County Mosquito Commission?
A. Yes, sir, they have.

Q. In what amount?
A. $29,985.

Q. And what was that contract for?
A. For the purchase of some pumps to be used out in the meadows.

Q. What were they paid for the pumps?
A. Who, sir?

Q. Well, would you explain the transaction?
A. Oh, yes. The Mosquito Commission got a quote for the pumps of $17,125. Then by a series of correspondence the contract for the purchase of the pumps was subsequently assigned to Emory, and Emory, in fact, bought the pumps, as far as we can ascertain from examination of their books and records.

Q. Have those pumps been located?
A. The investigators in going into the field ascertained that two of the pumps are in place and one is not.

Q. Missing?
A. That's right.

Q. Have you made a determination as to whether or not there are any questionable expenditures in the general operating account?
A. Yes, sir, we have.

Q. What percentage would be questionable?
A. With the exclusion of-we excluded salaries because we did not go into any payroll analysis. The answer would be 28%.

Q. What do you base this percentage on?
A. We base that percentage on the fact that the same suppliers in general who we have referred to in the special account also got paid out of the general account.

Q. All right. By way of recapitulation, would you again state for the record the name of the account you are referring to and what percentage o f the transactions you find questionable?
A. And the amount of money?

Q. And the amount of money.
A. Right. Out of the general account, 28% for a total of $201,637; 28%, $201,637. Out of the special account, 72% for $361,307; $361,307. And, of course, out of the secret account 99.3% questionable for a total of $154,584.

The grand total of this money is $717,528.

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