Frank J. Rizzo, 57, of Parlin, was sentenced today to three years in state prison by Superior Court Judge Philip E. Haines in Burlington County. He pleaded guilty on Jan. 30, 2014 to a charge of second-degree conspiracy. His co-defendant Michael Kouvaras, 62, of Maplewood, was sentenced by Superior Court Judge James W. Palmer Jr. on Aug. 25, 2014 to 364 days in the county jail as a condition of a term of three years of probation. Kouvaras pleaded guilty on Jan. 30, 2014 to a third-degree charge of violating the Asbestos Control and Licensing Act.

Deputy Attorney General Mary Erin McAnally prosecuted the defendants and handled the sentencing hearings for the Division of Criminal Justice Specialized Crimes Bureau.

In pleading guilty, the defendants admitted that, through the company they ran, Deuteron Capital, LLC, doing business as South Street Fillit Recycling of Riverside, they illegally removed asbestos without a license and illegally disposed of asbestos at the Zurbrugg Memorial Hospital site. The charges were contained in a June 20, 2012 indictment that resulted from a joint investigation by the Division of Criminal Justice Environmental Crimes Unit and the Department of Corrections Special Investigations Division.

“These contractors expected a big payday from recycling the copper and steel at this hospital site, but when they learned the cost of properly removing the hazardous asbestos that stood in their way, they callously put their profits ahead of the health and safety of the public and their own workers,” said Acting Attorney General Hoffman. “The greed and recklessness they displayed is appalling.”

“Unscrupulous business operators who unlawfully pollute and who break the laws that protect our workers had better take heed, because there are significant criminal penalties for such conduct,” said Director Elie Honig of the Division of Criminal Justice. “We will continue to defend the rights of New Jerseyans to live and work in a safe environment.”

In early 2010, Rizzo solicited the owner of the Zurbrugg site for the contract to demolish the hospital. South Street was given the contract, which specified that the company would retain all of the proceeds from the recycling of metal and arrange for and pay all demolition costs, including asbestos abatement and disposal. An engineering report on the hospital buildings, which was provided to the defendants, identified extensive asbestos throughout the structures.

The defendants initially retained a licensed asbestos abatement contractor, which provided the required 10-day notice of its intent to perform asbestos abatement at the site to the Department of Labor, Department of Health & Senior Services and U.S. Environmental Protection Agency. However, the defendants paid only a few thousand dollars of the 10 percent deposit required by the contractor to start the work. The contractor estimated abatement would cost about $220,000. The licensed contractor worked only one day at the site, removing a small amount of asbestos.

The state’s investigation determined that, between August 2010 and March 2011, Kouvaras, the owner of South Street, and Rizzo, the project organizer, used untrained day laborers, including inmates from Clinton House, a work release halfway house in Trenton, to remove asbestos from sections of the hospital in connection with demolition at the site and their efforts to salvage valuable copper and steel. They engaged in asbestos removal without the required license from the New Jersey Department of Labor and without following the requirements of federal and state laws to prevent the release of toxic asbestos dust and debris.

The investigation revealed that the defendants directed the unlicensed workers to remove asbestos or asbestos-containing material, bury bags of asbestos in the ground, and dump bags of asbestos on the floor of a boiler room to make it look like the building was vandalized. The workers did not wear protective equipment, except for paper masks that are not authorized as safe for asbestos removal, and they quickly removed the paper masks because the masks made it difficult to breathe.

Division of Criminal Justice detectives executed a search warrant at the site on Filmore Street on March 28, 2011, and discovered material containing asbestos strewn on the floor of the boiler room. They found a roll-off container holding over 200 plastic bags of materials, 30 of which were tested and found to contain asbestos. They also uncovered two bags containing asbestos tiles buried in the ground during limited excavation at the site.

The U.S. Environmental Protection Agency Region 2 took jurisdiction of the site and has completed a removal action.

The state investigation began in early 2011 when the Department of Corrections (DOC) Special Investigations Division received a tip that inmates were being used to remove asbestos at the site. DOC alerted the Division of Criminal Justice, which joined the investigation. The Department of Environmental Protection, Department of Health & Senior Services and Department of Labor & Workforce Development assisted with the investigation, including helping with the execution of search warrants at the Zurbrugg site and South Street offices beginning on March 28, 2011.

The investigation was conducted for the Environmental Crimes Unit, within the Division of Criminal Justice Specialized Crimes Bureau, by Sgt. Steven Ogulin, former Detective Dawn Ryan, former Detective Michael Klumpp, Deputy Attorney General McAnally, Deputy Attorney General Phillip Leahy and retired Supervising Deputy Attorney General Betty Rodriguez. The investigation was led for the Department of Corrections Special Investigations Division by Principal Investigator Daniel Klotz.

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