A former consultant for the central purchasing agent of the Archdiocese of New York pleaded guilty today to eight fraud, tax and obstruction of justice charges, the Department of Justice announced.

The former consultant, Joseph J. DeRusso, of Florham Park, N.J., is the last of four defendants to plead guilty to the charges contained in a nine-count indictment filed in January 2006.

DeRusso, was scheduled for sentencing in November and his plea agreement recommends a minimum prison sentence of nearly five years.

The indictment charged DeRusso and his co-defendants -- Vincent J. Heintz and Nanette B. Melera, both of Briarcliff Manor, N.Y.; and Michael J. O'Shaughnessy of Queens, N.Y. -- with using their positions as employees and consultants at Institutional Commodity Services Inc., the archdiocese's purchasing arm, to defraud the archdiocese of more than $2 million between 1996 until 2004. Heintz, Melera and O'Shaughnessy, who have already pleaded guilty, will be sentenced next month.

According to the charges, numerous vendors doing business with the ICS were required to pay DeRusso more than $1.2 million in commissions, which DeRusso secretly shared with the trio. Additionally, DeRusso and his co-defendants embezzled more than $1 million from the archdiocese through a self-dealing scheme.

DeRusso, along with Heintz, the former general manager of ICS, conspired to defraud the Internal Revenue Service by arranging to receive at least $250,000 in cash from a vendor to ICS, which DeRusso failed to report as income. DeRusso also pleaded guilty to tax evasion for the years 1999 through 2002, based on his failure to report cash received from vendors as part of the self-dealing scheme.

The investigation of food distributors and suppliers of other goods and services to various not-for-profit entities in the New York metropolitan area is ongoing.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access