Director of Operation of the North Bergen Housing Authority Arrested for Extortion

NEWARK—The director of operations for the Housing Authority of the Township of North Bergen, New Jersey, was arrested this morning on charges of extorting employees of a maintenance company contracted by the authority, U.S. Attorney Paul J. Fishman announced.

John T. Kennell, aka “Jack Kennell,” 49, of North Bergen, is charged by complaint with one count of obstructing and affecting commerce by extortion under color of official right and induced by fear of economic harm. Kennell is scheduled to make his initial appearance today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

According to the complaint unsealed today:

While the director of operations for the NBHA, Kennell used his official position to extort cash payments from employees of a company (“Company 1”) that provided repair and grounds maintenance services. Kennell, who supervised the employees of Company 1 working for the authority, accepted cash payments in amounts ranging from $100 to $400 from employees for, among other things, facilitating additional paid vacation days for these employees. Kennell assisted in securing these additional paid vacation days by falsely reporting to Company 1 that the employees were working at the NBHA, when they were, in fact, traveling outside the United States. Between February 2008 and June 2011, Company 1 compensated employees for approximately 80 days of unauthorized vacation, totaling $12,498, because of Kennell’s actions.

Kennell accepted approximately $2,000 to $2,500 in payments for his official assistance in this fraud. He also accepted cash payments of approximately $50 to $100 from an undocumented employee of Company 1 for permitting that employee to twice change the alias that employee was using to continue working. Using his position of authority, as well as the threat of termination of employment, Kennell also regularly extorted the employees of Company 1—sometimes as frequently as twice a month—for cash payments in amounts ranging from $10 to $20 per employee.

The extortion count charged in the complaint carries a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward in Newark; special agents of U.S. Department of Housing and Urban Development Office of Inspector General, under the direction of Special Agent in Charge Cary A. Rubenstein; and criminal investigators from the U.S. Attorney’s Office in Newark, with the continuing investigation leading to today’s charges.

The government is represented by Assistant U.S. Attorney Lee M. Cortes, Jr. of the U.S. Attorney’s Office Special Prosecutions Division in Newark.

The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.