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An indictment was unsealed on Thursday, May 19 charging Lindenhurst resident Sharon Gardner, age 56, the former Director of Food Services for the Hempstead Union Free School District, and Elmont resident Maria Caliendo, age 57, in the scam.
US Attorney Breon Peace said that Gardner and Caliendo - the owner of foodservice providers Smart Starts NY, Inc. and Prince Umberto’s restaurant in Franklin Square - have been charged with conspiracy to commit honest services wire fraud in connection with a kickback scheme involving contracts between the school and restaurateur.
“As alleged, Gardner and Caliendo engaged in a scheme in which Gardner steered more than $1 million in sole-source school breakfast contracts to Caliendo's company, in spite of the fact more cost-effective options existed,” FBI Assistant Director-in-Charge Michael Driscoll said in a statement.
“In exchange, Caliendo illicitly paid more than $100,000 in kickbacks to Gardner, which she used to purchase a variety of personal luxuries.”
According to the indictment, Gardner helped secure lucrative contracts for Smart Starts to provide pre-packaged breakfast meals for Hempstead students, calling her a “sole-source” vendor of breakfast food.
Prosecutors said in doing so, it helped avoid competitive bidding for the district’s business, despite more cost-efficient options.
In total, Caliendo’s company received more than $1.2 million from the Hempstead School District.
Peace said that in exchange for the preferential treatment, Caliendo kicked back a portion of the contract proceeds to Gardner through fraudulent payroll deposits and other payments.
Gardner received more than $100,000 through the scheme.
Investigators said that to conceal the kickback scheme, payments were deposited into a bank account that was created in the name of one of Gardner’s family members.
However, the money was spent by Gardner to live a luxury lifestyle, including international vacations, leased vehicles, and home furnishings. Approximately $13,000 was also withdrawn in cash from ATMs near her home and workplace.
Prosecutors noted that in voluntary interviews with investigators, Caliendo made false statements regarding the justification for the payments, stating that represented repayment for a startup loan from Gardner’s family member, despite having received no capital contribution, work, or labor from that person.
“It’s alleged this duo conspired together in this fraud scheme where Gardner procured millions of dollars in contracts for Caliendo’s business, choosing Caliendo’s company’s bid in exchange for high-value kickbacks,” IRS-CI Special Agent in Charge Thomas Fattorusso said. “While Gardner accepted the higher bid for her own personal gain, the taxpayers of the Hempstead Union Free School District were left holding the bill.”
If convicted, Gardner and Caliendo face up to 20 years in prison for conspiracy to commit wire fraud.
“Instead of following the legitimate bidding process for a food services contract, the defendants allegedly used the Hempstead School District as their own piggy bank,” Nassau County District Attorney Anne Donnelly said in a statement.
“This prosecution sends a strong message to public officials that anyone using tax dollars to unjustly enrich themselves will be prosecuted to the fullest extent of the law.”
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