State Officials Indicted in Collection Corruption Case

The Attorney General for New Jersey announced yesterday that six state treasury officials were formally charged with misconduct for allegedly accepting thousands of dollars in gifts from a collection agency that was collecting unpaid taxes for the state.

The announcement comes after a lengthy investigation initially announced last December. State prosecutors allege that officials at New Jersey?s Division of Taxation accepted gifts such as dinners, golf outings and spa services from representatives of collection industry giant OSI from 1999 to 2005.

Officials named in the indictment included the director of the Division of Taxation, the deputy director and four other officials. Two former OSI employees were also indicted for their roles in the case.

Commenting on the case, NJ Attorney General Zulima V. Farber said, ?Instead of declining the lavish gifts offered by this state vendor and reporting them, as clearly required by law and their department?s code of ethics, these state officials allegedly welcomed them. New Jersey residents must be able to count on the fact that officials who make decisions on state contracts won?t be subject to influence by vendors who offer generous freebies.?

OSI said today that it immediately launched its own investigation when it learned of the allegations last year. The two employees charged are no longer with the company; both held high-ranking positions in OSI?s sales department.

OSI CEO Kevin Keleghan said in a statement, ?Today?s indictments are directed at certain State officials and two individuals who are no longer employed by OSI. When OSI?s management first learned of the allegations, it immediately hired outside counsel and conducted an extensive internal investigation. OSI has taken aggressive steps to strengthen and restate its policy against the granting of business courtesies to any employee of any governmental entity.?

OSI noted today that the company has been conducting collection work on behalf of New Jersey for more than 12 years and to date has collected one-half billion dollars in delinquent taxes and other outstanding revenues for the state.