U.S. Attorney's Office
District of New Jersey
(973) 645-2888
March 17, 2015

Hudson County, New Jersey Contractor Admits Fraudulently Receiving More Than $200,000 in Government-Funded Projects Through Collusion

TRENTON, NJ—A Hudson County, New Jersey, man, today admitted to colluding with other contractors to secure projects funded by U.S. Department of Housing and Urban Development grants, U.S. Attorney Paul J. Fishman announced.

John Youngclaus, 43, of Bayonne, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with theft of $224,250 in government funds.

According to documents filed in this case and statements made in court:

Youngclaus was the owner of JRY Plumbing and Heating (JRY), a plumbing company in Bayonne. The City of Bayonne Department of Community Development (CBDCD) was a government agency that received funds from the U.S. Department of Housing and Urban Development (HUD) under a federal program that provided grants up to $20,000 to low-income families to rehabilitate their homes and to repair conditions affecting health and safety, accessibility, energy efficiency or code compliance. The CBDCD selected contractors for the HUD-funded rehabilitation grants through a competitive bidding process that required the submission of bids from competing contractors with estimated price quotes. The CBDCD selected the lowest bidder for particular applications.

Between January 2012 and December 2012, Youngclaus solicited, received and submitted bids from competing contractors that were higher than the bids that Youngclaus submitted to the CBDCD on behalf of JRY. On at least one occasion, Youngclaus received blank invoices from a competing contractor and Youngclaus wrote the job details and price quote on the blank invoice and submitted the fraudulent bid along with a lower bid from JRY to the CBDCD for a certain grant-funded job to obtain the grant project. The information also describes at least two instances when Youngclaus submitted fraudulent bids from competing contractors for properties that he owned in Bayonne. Although the jobs were awarded to the competing contractor with the lowest bid, JRY plumbing performed the work on the properties owned by Youngclaus and received the payment for the work.

As a result of Youngclaus colluding with other contractors, JRY wrongfully obtained $224,250 in HUD funds from the CBDCD during 2012.

The theft of government funds charge to which Youngclaus pleaded guilty carries a maximum potential penalty of 10 years in prison and maximum fines of $250,000. Sentencing is currently scheduled for June 22, 2015.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; special agents of the U.S. Department of Housing and Urban Development, Office of the Inspector General, under the direction of Special Agent in Charge Christina Scaringi; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen in Newark, with the continuing investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Jacques S. Pierre of the Special Prosecutions Division and Assistant U.S. Attorney Steven G. Sanders of the Appeals Division.

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