A federal grand jury returned an indictment on Friday charging the former business administrator of the Hillsborough Township School District in connection with an overtime fraud and kickback scheme.

According to the indictment in a statement on Wednesday, Aiman Mahmoud, 56, who served as the business administrator for the HTSD from 2008 through the end of 2021, accepted tens of thousands of dollars in cash kickbacks connected to a multimillion-dollar project to upgrade existing school facilities and construct a new school building greenlighted by a 2019 referendum.  

To oversee aspects of the project, including safety monitoring, Mr Mahmoud arranged for Kenneth Gratto, 54, to be appointed as the site supervisor/owner’s representative to assist two companies carrying out the construction project.

The indictment also alleged that shortly after Gratto was hired, he agreed to provide substantial cash kickbacks to Mr Mahmoud in exchange for Mahmoud’s agreement to approve Mr Gratto’s time sheets, which substantially exaggerated the number of overtime hours Gratto had worked on behalf of the HTSD.  

After receiving his paychecks from the involved companies—who were reimbursed by the HTSD for those amounts—Mr. Gratto would deposit the checks, withdraw cash equal to the intended kickback, and deliver that cash in envelopes at locations Mr Mahmoud chose, typically within Mr Mahmoud’s unlocked school vehicle.  

Mr Mahmoud is alleged to have taken at least approximately $70,000 in kickbacks from Gratto.

The six-count Indictment charges Messrs Mahmoud and Gratto with conspiring to embezzle, steal, and obtain by fraud funds belonging to and under the care, custody and control of the HTSD, contrary to Title 18, United States Code, Section 666(a)(1)(A), in violation of Title 18, United States Code, Section 371.  

The maximum term of imprisonment for this offence is five years’ imprisonment and a $250,000 fine. Each defendant is also charged individually with embezzling, stealing and obtaining by fraud those same funds belonging to and under the care, custody and control of the HTSD, in violation of Title 18, United States Code, Section 666(a)(1)(A).  

Those charges carry a maximum term of imprisonment of 10 years and a maximum fine of $250,000.   In addition, the two defendants are charged with conspiring to commit extortion under colour of official right, in violation of Title 18, United States Code, Section 1951(a).  

Both Messrs Mahmoud and Gratto are individually charged with extortion under colour of official right, in violation of Title 18, United States Code, Section 1951(a) and 2. These latter three charges all carry a maximum term of imprisonment of 20 years and a maximum fine of $250,000.