Former Paterson Municipal Utilities Authority Commissioner Admits Accepting Kickbacks

NEWARK, N.J. – A former commissioner with the now-defunct Paterson Municipal Utilities Authority (PMUA) today admitted his role in two schemes to steal funds from the authority, U.S. Attorney Craig Carpenito announced.

Erik Lowe, 50, of Paterson, New Jersey, pleaded guilty before U.S. District Judge Jose L. Linares to an information charging him with one count of conspiring to commit extortion under color of official right and one count of extortion under color of official right.

According to documents filed in this and other cases and statements made in court:

Lowe was a commissioner of the PMUA from February 2009 through May 2015 and exercised control over the authority’s finances. The PMUA was created to manage the hydroelectric plant on the Passaic River in Paterson and to care for and manage certain surrounding properties.

Lowe and Carnell Baskerville, a self-employed contractor, entered into an agreement whereby Lowe would approve payments from the PMUA to Baskerville’s company for services. Both men knew Baskerville had not performed and would not perform any services. Between December 2014 and May 2015, Lowe wrote $146,500 in checks from the PMUA to Baskerville’s company. Lowe directed Baskerville to deposit these checks into Baskerville’s bank account and to kick back to Lowe a significant percentage of this amount in cash to reward Lowe and a fellow MUA commissioner for their official assistance in carrying out the scheme. Baskerville pleaded guilty in February 2018 to his role in the scheme and is scheduled to be sentenced on Sept. 6, 2018.

From August 2012 through November of 2014, Lowe engaged in a similar scheme with a second contractor whose company installed and repaired fences for residential homes and commercial business. Lowe admitted that initially he inflated the checks paid to this contractor substantially above the value of the jobs the contractor performed so that the contractor could kick back thousands of dollars to Lowe. Near the end of the scheme, Lowe was issuing checks worth thousands of dollars to the contractor knowing that no job had been or would be performed. Lowe issued checks totaling $141,700 to the contractor and accepted tens of thousands of dollars in kickbacks.

The two counts to which Lowe pleaded guilty each carry a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 11, 2018.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Mark J. McCarren of the U.S. Attorney’s Office’s Special Prosecutions Division in Newark.

Defense counsel: Linda Foster Esq., Assistant Federal Public Defender, Newark