Community Corner

Prosecutor: Former Wall Schools Super Bilked District, Laundered Money

An indictment brought against James F. Habel Monday charges he stole from district, lied about vacation time, hid money and defrauded two mortgage companies.

In his nine years as Superintendent of Wall Township Schools, James F. Habel took home a healthy annual paycheck, ranging between $145,000 and $225,000.

He was given unlimited use of a luxury SUV, paid for and maintained by the district, and a lavish benefit package that included 25 vacation days, in addition to the time off that students receive during the 180-day school year. Unused vacation time could be cashed out and the money transferred to tax-free shelters, which the district also annually contributed to, according to his employment contracts.

But authorities say Habel wanted more.

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Two separate indictments were handed up Monday by a Monmouth County grand jury, charging Habel with a laundry list of crimes, including official misconduct, money laundering, theft, eight counts of falsifying records and even stealing a district-paid iPad, according to the indictments.

“If the allegations are proven true, the level of greed and avarice is remarkable,’’ said Acting Monmouth County Prosecutor Christopher Gramiccioni.

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It is the second indictment of a former Wall Township school official in as many months.

Former Assistant Superintendent Sandra Brower – Habel’s deputy at the time -- was indicted on May 6 on charges she failed to report a possible sexual assault of a special needs 4-year-old student while she was employed with Wall schools and lied to police to cover up her inaction.

Brower, 46, pleaded not guilty to the charges. She is due in court June 24. She was suspended without pay from her current job as Superintendent of Lacey School District in Ocean County, pending the outcome of the case.

In Monday’s developments, Habel, 56, was added as a defendant to the indictment charging Brower. In that indictment, Habel faces the same charges as Brower:  official misconduct, hindering and obstruction.

In the second, 14-count indictment, Habel faces an additional charge of official misconduct, as well as money laundering, theft, theft by deception, two counts of mortgage fraud and eight counts of falsifying records, the indictment says.

School district officials were tight-lipped on Habel’s indictment Monday morning, releasing a statement to media organizations saying officials will answer no questions on the Habel matter.

"Dr. Habel resigned from his position in the district last year, in June, 2012, and the Board, as well as its administration has fully cooperated with the Monmouth County Prosecutor's Office during the course of this lengthy investigation," the statement says. "Obviously, the Board and the current administration must leave any comments as to the specific allegations to the prosecutor's office for an appropriate response."

Indictment: Uncounted Absences, Double Dipping, Unreported Mileage

Habel bilked the Wall school district throughout his career by lying about his vacation time, according to the indictment. Habel claimed to be in the district or working in a professional capacity at least 110 days when he was actually at his second home in Florida or otherwise not working. Those days cost the district about $93,000, the indictment says.

Habel, who was solely responsible for reporting his time off, was paid for 549 vacation days – or more than a year and a half – resulting in payments of about $443,000, the indictment says.

But while he was paid for those 549 accrued vacation days, Habel’s attendance records show that he was paid for only 363 days, leaving 186 “double dipped’’ days paid by the district and adding another $268,992 Habel was not entitled to, the indictment says.

Habel also “substantially underreported’’ his personal mileage in the district-provided Yukon Denali, falsely declaring no more than 3,750 annual miles on the vehicle, while driving it several times in a given year from New Jersey to his second home in Dunedin, Florida – a round-trip of about 2,282 miles. The underreporting resulted in about $7,000 in lost taxable income for Habel, the indictment says.

Records Ordered Destroyed, Prosecutor Says

Habel on numerous occasions directed district employees to destroy records that accurately accounted for his vacation time and attendance, the indictment says. He also personally removed such records on occasion from his own personnel file and elsewhere, according to prosecutors.

Habel ordered the district Information Technology director, Jeff Janover, to delete emails from the district’s servers, including emails from an airline Habel frequently used to travel to Florida as well as emails from some members of the Board of Education, prosecutors say. Janover, however, never followed through, according to the indictment.

Habel also shredded or destroyed all of his office files before leaving the district in December 2011, creating “severe transition challenges’’ for the next administrator, the indictment says.

Habel Charged With Mortgage Fraud

Prosecutors say that in October 2011 Habel refinanced his Point Pleasant home, lying to the mortgage company about his intention to stay in the home that he identified as his ‘primary residence’’ and that his monthly income would not drop, despite that he had already submitted his resignation to the Wall Township School district four months prior.

Habel’s income was going to be reduced from his regular $18,700 monthly salary to $9,767 pension payments, but he did not disclose this to the mortgage company. And the home had already been on the market for sale in June 2011, even while Habel certified to the mortgage company his intention to stay in the home for another year, the indictment says.

Habel also certified to the mortgage company that his “probability of continued employment’’ with the Wall School District was “100%,’’ the indictment says, despite that he had already submitted his resignation.

In February of 2012, Habel refinanced his home in Dunedin, Fla., claiming it to be his “primary residence,’’ and his New Jersey home as his ‘secondary residence.’’ He also withheld from that mortgage company that his income was about to be cut in half, since he had submitted his resignation to the Wall School District already, the indictment says.

Habel also certified to the mortgage company on March 12, 2012 that his “probability of continued employment’’ with the Wall School District was “100%,’’ the indictment says.

Habel at the time was out on sick leave before leaving the district on June 30, 2012.

During the closing, Habel presented a Florida driver’s license listing his Dunedin property as his primary residence, entitling him to a reduction in his Florida property taxes, never mentioning that he had a New Jersey driver’s license and a New Jersey home he also claimed as his primary residence, the indictment says.

Stole $8K in District Electronics, Indictment Charges 

The district issued Habel about $8,771 in electronics – an iPad, a laptop computer and a desktop computer and a cell phone -- that Habel never returned after he quit the district, ignoring numerous attempts by district officials to contact Habel about returning the electronics, the indictment says.

Maximum Sentences

Between the two indictments, Habel faces two counts of official misconduct, a charge that comes with a minimum five-year prison term, with a maximum of 10 years. It also comes with a lifetime ban on holding public employment.

The remaining charges in the first indictment – hindering and obstruction – carry maximum sentences of five years and 18 months, respectively.

Charges in the second indictment carry a total maximum sentence of 80 1/2 years. Combined with a total maximum sentence from the first indictment, Habel faces a possibility of 97 years in prison, if convicted on all charges.

See the corresponding article for a breakdown of the charges.

Point Pleasant Home Raided

Monday's indictments end months of speculation after Habel's Point Pleasant home was raided in September.

In the early morning hours of Sept. 13, Monmouth County Prosecutor's Office officers raided Habel's home on Blue Heron Court, which was up for sale at the time. Acting Prosecutor Gramiccioni said only that his office had conducted a "investigative action'' at Habel's home.

The raid followed a Wall Patch story quoting former Board of Education President John Tavis, who has since resigned from the panel, saying that Habel's vacation time payout would exceed $400,000, since the former administrator had never taken a vacation day in his tenure.

Habel spent the last six months of his term at the helm of the school district on medical leave, citing an undisclosed medical problem. The superintendent used some of that accrued sick time beginning in January. He did not return to the district.

'Great Interest' in Florida Superintendent Job

Habel, who now lives in Dunedin, Fla. full time and had expressed "great interest" in a superintendent job in the Sunshine State in 2008, according to a letter he wrote to the Pinellas County School Board, located in Largo, Fla.

In it, Habel says he has been a part-time resident of Pinellas County since 1987 and has an interest in maintaining good schools there.

"I have a vested, long-term commitment to Pinellas County and the future of our school system,'' he said in the letter, which is attached to this story.

Habel's pay was cited in a 2006 New Jersey Commission of Investigation report titled, "TAXPAYERS BEWARE — What You Don’t Know Can Cost You: An Inquiry Into Questionable and Hidden Compensation for Public School Administrators."

In it, the commission found that school districts, legally, can pay employees in a tax-free annuity if the employee agrees to take a reduction in salary. The legal practice, however, appears "in many instances to have been awarded as adjuncts to base salaries rather than in place of corresponding salary reductions as required by the enabling statute."

The report cites a payment of $69,450 into an annuity made to Habel during the 2003-04 school year. 

The report cites a practice it calls  "questionable'' in regard to total compensation for administrators. For instance, Habel's reported salary to the state Department of Education in 2004-05 was $159,000. His actual compensation — including benefits and perks — was $215,780, a difference of $56,780 or 35.7 percent, the report says.

"The official DOE listing provides no clue that many top administrators receive payments for unused leave, annuities, pension contribution reimbursements and other forms of remuneration well beyond the scope of regular paychecks,'' the report says.

Habel is expected to be arraigned on the charges in Monmouth County Superior Court on June 24, the same date Brower is due to appear.


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