State charges father and son with using Jersey City condo project to scam more than $2 million from developer, bank and other clients
Saturday, December 11, 2010
By RON ZEITLINGER
DEPUTY MANAGING EDITOR - The Jersey Journal

A father and son construction team hired to renovate a Jersey City building and build 19 condo units defrauded the developer, a bank and other clients of more than $2 million in connection with the project, the state Attorney General's Office said.

David E. Garsia Sr., 70, of North Haledon, and his son, David J. Garsia Jr., 42, of Glen Rock, were arrested yesterday and charged with conspiracy, money laundering, theft by deception, securities fraud, misapplication of entrusted property and misconduct by corporate officials, Attorney General Paula T. Dow and Criminal Justice Director Stephen J. Taylor announced.

The complaint filed against the Garsias also charges companies they own - Metro North Construction Group LLC, Metro Design Construction Group LLC, Electrosys Systems Inc. (doing business as Electrosyst), 237 Group Inc. and Great Falls Industrial Park Inc.

The two men are being held in Morris County jail on $500,000 bail and each has been ordered to surrender his U.S. passport.

Authorities say that from April 2006 to February 2008 Metro North was contracted by Vincent Paragano, owner of 140 Grant Avenue Associates LLC and Raritan Bay Associates, to renovate an existing building and build 19 condominium units at 18-20 Park Street in Jersey City.

Garsia and his son misrepresented Metro North to get hired and obtain financing, then performed substandard work, failed to complete the project and unlawfully diverted funding from the project and spent it through their other companies, authorities said.

The Garsias lied about how much work was complete in order to secure additional funding, such as stating that the building's insulation, fire proofing, ventilation systems and sprinkler systems had been installed, when in fact they had not, authorities say.

During the course of the project, the Garsias received approximately $2 million from Unity Bank, 140 Grant Avenue Associates, Raritan Bay Associates and Paragano, the state claims in its charges.

The state claims the Garsias laundered more than $500,000 by making cash and debit/ATM card withdrawals, making credit card payments, converting funds to other projects, and using money for personal expenses such as furs and jewelry.

The Garsias each face a possible 80 years in prison and fines of up to $1.6 million. The charges will be presented to a state grand jury for potential indictment.