Scandal at Cinnaminson Sewerage Authority

Seven men—including five Cinnaminson Sewerage Authority employees—were arrested on theft and corruption charges Wednesday in a three-pronged scheme the county prosecutor called a “brazen and insane attempt” to steal taxpayer resources.

More than $100,000 in stolen public resources has been uncovered so far.

The suspects include the sewerage authority’s superintendent, Paul Phillips, 54, of Dartmouth Avenue in Cinnaminson, and assistant superintendent, William Yannarella, 53, of Delran.

Also arrested were:

• Jeffrey Lehman, 22, of Nassau Road in Cinnaminson, a sewerage authority employee
• Joseph B. Lehman, 26, of Nassau Road in Cinnaminson, a sewerage authority subcontractor
• Joseph J. Lehman Jr., 62, of Nassau Road in Cinnaminson, father of the Jeffrey and Joseph B. Lehman
• Carmelo Colon, 26, a sewerage authority employee, brother to Mike Colon and son-in-law of Phillips
• Mike Colon, 22, of Morgan Avenue in Cinnaminson, a sewerage authority employee, brother to Carmelo Colon

A warrant has been issued for part-time sewerage authority employee Scott Mayes Jr., 21, of Delran. He had not been taken into custody as of Wednesday afternoon. Authorities call him a “lesser player” in the case.

"This was a significant case," Cinnaminson Public Safety Director Michael P. King said in a statement. "It was the tireless efforts of those who conducted the investigation that brought it to a successful conclusion."

Stolen backhoe starts audit

An investigation by  and the Burlington County Prosecutor’s Office uncovered the three schemes involving a mix of the suspects, Burlington County Prosecutor Robert Bernardi said at a Wednesday press conference.

It all started with a missing, township-owned backhoe. Authorities allege that Phillips told Cinnaminson officials several years ago that the backhoe, purchased for about $8,700, needed more than $6,000 in repairs. The equipment was “deadlined” and taken out of rotation as not repairable.

In reality, the backhoe was in fine condition. The Lehmans, the prosecutor said, transported the backhoe to the elder Lehman’s home in the Poconos for personal use. When Cinnaminson authorities recovered the backhoe in December, it was in working order.

Larger wrongdoings uncovered

That incident prompted an audit of the Cinnaminson Sewerage Authority, initiated by the authority’s board of commissioners. The board, whose members are appointed by the township committee, oversees the authority, which has 15 employees.

The audit and ensuring investigation uncovered two more schemes that cost taxpayers tens of thousands of dollars. The board's solicitor later contacted the county prosecutor after uncovering suspect charges and practices within the authority. The prosecutor's office worked with Cinnaminson Police to investigate.

In one scheme, Phillips, Yannarella, Jeffrey Lehman and Carmelo Colon allegedly used their private J&B Environmental Services firm to provide sewer maintenance work for the Wyndham Hotel in Mt. Laurel.

The suspects “ran, for lack of a better term, a side business, dealing with businesses that needed the services of licensed sewerage individuals,” Bernardi said. “It turns out they were running their business on township time.”

Employees “showed up in authority vehicles, if you can believe it, and on some occasions wearing Cinnaminson Sewerage Authority uniforms while performing (private) work at the Wyndham,” Bernardi added.

The men ordered parts and supplies for their private firm and charged the Cinnaminson Sewerage Authority for the costs.

“For instance, a pump that was needed to do their side job at the Wyndham Hotel would be vouchered and processed through the Cinnaminson Sewerage Authority and paid for with taxpayer dollars,” Bernardi said. “Then that pump would be physically taken and installed at the Wyndham.”

The suspects barely bothered to cover their tracks, it seems. Surveillance footage shows one of the suspects moving a Cinnaminson Sewerage Authority 55-gallon drum of chemicals to the hotel, installing the drum and peeling off a Cinnaminson Sewerage Authority label.

The Wyndham has cooperated with the investigation and provided copies of payments to the private company and individuals arrested.

Police estimate that the suspects charged more than $50,000 to the Cinnaminson Sewerage Authority for this side business.

The third part of the scam is “an aside, but a rather large aside,” the prosecutor said. The suspects in this part—Phillips, Yannarella, Jeffrey Lehman, Joseph B. Lehman, Carmelo Colon and Michael Colon—allegedly used sewerage authority funds to purchase personal items. Using a Camden firm, Contractor Services, the sewerage authority paid for seemingly legitimate items, like pumps. In reality, the suspects were using the funds to purchase a laundry list of home goods that were delivered directly to the suspects.

“Things such as washers and dryers, George Foreman grills, golf clubs, stereos, stereo radios for installation in cars, parts for cars, parts for motorcycles,” Bernardi listed, along with Dyson vacuum cleaners, televisions, towing accessories, entertainment centers and GPS systems.

The merchandise fraudulently ordered and used for personal use totals $44,000, the prosecutor said.

Search warrants executed on the suspects’ homes and cars turned up many of these items, according Bernardi. Others could have been thrown out or moved, he acknowledged, as the sewerage authority employees were suspended last week and therefore likely knew some kind of law enforcement action was imminent.

No charges have been filed so far against the sales manager at Contractor Services accused of facilitating the fraudulent purchases.

The employees and charges

The charged sewerage authority employees have nearly 60 years combined employment with Cinnaminson, according to an NJ.com database. They are:  

Superintendent Paul Phillips, 54, is a 29-year veteran of the Cinnaminson Sewerage Authority. His 2011 salary was $89,904, according to state records.

• Charges: three counts of corruption of public resources, falsifying/tampering with records, three counts of conspiracy-corruption of public resources, three counts of theft, conspiracy to commit theft and tampering with witnesses. Bail: $100,000 with an option to pay 10 percent.

Assistant Superintendent William Yannarella, 53, of Delran, has worked for the Cinnaminson Sewerage Authority for 20 years. His annual salary in 2011 was $71,660.

• Charges: theft, conspiracy to commit theft, corruption of public resources, and conspiracy-corruption of public resources. Bail: $40,000 with an option to pay 10 percent.

Jeffrey Lehman, 22, an equipment operator, is a four-year sewerage-authority employee. His salary in 2011 was $36,984.

• Charges: three counts of theft, two counts of conspiracy to commit theft and corruption of public resources. Bail: $60,000 with an option to pay 10 percent.

Carmelo Colon, 26, is Phillips' son-in-law. He has worked for the sewerage authority for three years. His salary last year was $36,464. 

• Charges: two counts of corruption of public resources, two counts of conspiracy-corruption of public resources, theft and conspiracy to commit theft. Bail: $60,000 with an option to pay 10 percent.

Colon's brother, Michael, 22, is a part-time sewerage authority employee who started last year. He was paid $7,071 in 2011. He is a township resident. 

• Charges: theft and conspiracy to commit theft. Bail: $20,000 with an option to pay 10 percent.

Joseph B. Lehman, who is a subcontractor, is charged with theft and conspiracy to commit theft. Bail: $20,000 with an option to pay 10 percent.

Joseph J. Lehman Jr., who is not employed by the authority, is charged with theft and conspiracy to commit theft. Bail: $20,000 with an option to pay 10 percent.

The amount of Mayes' salary and his length of employment was not available.

Stay with Cinnaminson Patch for more on this unfolding story, including reaction from township officials and the Cinnaminson Sewerage Authority.

Regional Editor Tim Zatzariny Jr. contributed to this report.