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Judge Denies Troiano’s Latest Attempt to Have Health Benefits Case Tossed

Shay Roddy/File Photo
Ernie Troiano Jr., left, leaves the courtroom with his attorney, Brian Pelloni, following a hearing in October 2022.

By Shay Roddy

COURT HOUSE – A Superior Court judge has denied a motion filed by former Wildwood Mayor Ernie Troiano Jr. to dismiss a criminal indictment against him.

Troiano was indicted by a state grand jury in July on second-degree official misconduct, second-degree theft by unlawful taking, third-degree tampering with public records and fourth-degree falsifying or tampering with records charges.

The charges stem from Troiano’s participation in the State Health Benefits Program while he was Wildwood’s mayor from 2011 to 2019. In 2010, the Legislature changed eligibility requirements for the program, requiring all future elected and appointed officials to be full-time employees, “whose hours of work are fixed at 35 or more hours per week,” in order to qualify for benefits.

The state accuses Troiano of illegally taking the benefits while working part time as mayor and is charging former Mayor Pete Byron and sitting Commissioner Steve Mikulski with identical counts.

Troiano had successfully convinced Presiding Judge Bernard E. DeLury Jr. to toss a prior indictment handed up in March in the same matter, in which prosecutors established a prima facie case – meeting the low burden of presenting some evidence to establish a crime had been committed and that the accused committed it – necessary to obtain an indictment.

Presiding Judge Bernard E. DeLury Jr., who has denied a motion by Wildwood politician Ernie Troiano Jr. seeking to have an indictment against him dismissed. Photo Credit: Shay Roddy/File Photo

In a June decision dismissing the original indictment, DeLury found that, based on a procedural misstep, the indictment was fatally flawed, because not all of the grand jurors were present to hear all of the testimony, which was presented over two days, live.

Relying on a transcript, which the state did in that presentment, did not allow jurors to effectively assess the credibility of the witnesses the state relied on to obtain the indictment, the judge found. The decision also resulted in dismissal of the indictment as it related to Byron and Mikulski.

DeLury’s decision was without prejudice, meaning the case could be re-presented. By the end of July, prosecutors from the state Attorney General’s Office had obtained a superseding indictment of Troiano, Byron and Mikulski on the same four charges.

In September, Troiano submitted a new motion to try to get that latest indictment tossed, relying on different arguments. That motion was argued in front of DeLury in November, days after Troiano had been reelected to the city’s three-member board of commissioners, along with incumbents Mikulski and Krista Fitzsimons.

Byron resigned in September, after being sentenced to probation in August after pleading guilty in federal court in Camden on unrelated income tax fraud charges.

However, this time DeLury found Troiano’s argument to be unpersuasive.

The State’s Case

In 2011, then-Mayor Troiano and his fellow commissioners, including Byron, passed a resolution at a public meeting declaring themselves full time, working a minimum of 35 hours per week.

In 2020, Mikulski was sworn in as a city commissioner after his election that fall and also began receiving state benefits.

The state alleges that the commissioners’ working hours were not generally monitored by anyone and time sheets were uniformly completed on a biweekly basis by their confidential assistant, Susan Maxwell, indicating all three commissioners worked 70 hours every two weeks, broken down into seven-hour weekday workdays.

During the eight-year period in which Troiano received benefits, his health insurance claims and premiums amounted to $287,000, according to the state.

Troiano’s Latest Arguments to Dismiss

While arguing to dismiss the latest indictment, Troiano’s defense team, led by attorney Brian Pelloni, raised several issues in regard to the way prosecutors presented the case to the second grand jury in July.

First, Troiano argued that by presenting his case together with the cases against his two co-defendants, it unfairly impacted grand jurors’ understanding of his culpability. He added that because prosecutors never charged a conspiracy count, and because multiple witnesses reported Troiano put in significantly more hours than his two co-defendants, his case was prejudiced by the fact the cases were presented together.

Exacerbating the prejudice, Troiano argued, was the fact that prosecutors told grand jurors that the three co-defendants’ “unlawful receipt of public health benefits” cost taxpayers more than $1 million in payouts for premiums and claims. In fact, Troiano argued, he was only responsible for about a quarter of that, and it was inappropriate to try to associate him with an alleged $1 million fraud against taxpayers.

The defense claimed that when prosecutors made their presentation in the superseding indictment, they offered jurors only a portion of the prior testimony of two key witnesses, thereby leaving the grand jurors not fully informed.

Ernie Troiano Jr., left, and his attorney, Brian Pelloni, at a hearing in Cape May County Superior Court in June. Photo Credit: Shay Roddy/File Photo

Particularly disturbing to the defense was that Maxwell’s testimony, which the administrative aide gave to the first grand jury, was partially redacted and presented to the second grand jury in the form of a readback by a detective who investigated the case, Caitlin Brennan.

Seven pages of Maxwell’s testimony before the first grand jury were never read back for the second grand jury, and Maxwell was never called to testify before the second panel, according to the defense.

Testimony cited by the defense that was redacted from the July grand jury’s transcript included her sworn statements that Troiano was salaried and so accounting for specific hours worked was unnecessary, as long as he worked a minimum of 35 hours a week; marking time sheets with an “X” meant Maxwell had personal knowledge that Troiano was working, and Troiano was permitted to, and did, work away from City Hall on a regular basis.

Brennan’s own testimony to the first grand jury was partially redacted from the second grand jury.

The defense argued that what was redacted from Brennan’s testimony to the original grand jury was of concern, including that no additional guidance was ever given by the state Health Benefits Commission after a Local Finance notice was issued; that neither the deputy city solicitor nor any other city official objected to the resolutions declaring the commissioners full-time employees; that the Human Resources Department, not the defendant, enrolled Troiano in the program; and that the way time sheets were completed was a standard practice of the city, not a scheme among defendants. The absence of hearing this testimony left the grand jury not “fully informed,” lawyers for Troiano argued.

In a third argument, Troiano asked the judge to throw the indictment out because grand jurors were never given an opportunity by the state to ask questions of a “key witness.” By not calling Maxwell, and instead reading the partial transcript of her prior testimony, the state infringed upon the grand jury’s right to fulfill its duty, Troiano argued.

Maxwell, the only lay witness ever called throughout the process and the witness with the most direct knowledge of how many hours the defendant worked, was never made available by the state for clarifying questions from grand jurors, let alone live testimony, nor was the panel ever informed of its ability to ask her questions. Lay witnesses are typically individuals who were present at the scene of the incident, were involved in the circumstances leading to the case, or possess knowledge that could shed light on the case’s facts.

Because grand jurors were deprived of the two witnesses’ whole testimony, couldn’t ask Maxwell questions, and couldn’t form any potential questions based on what prosecutors omitted, Troiano argued the grand jury’s vote was meaningless.

In a fourth stab at prosecutors’ second grand jury presentment, the defense argued that by having the lead detective on the case read the Maxwell testimony back to grand jurors, the state prejudiced the case against Troiano. It should have been a neutral party, like a court reporter, reading the transcript to jurors, he argued.

Brennan, the detective who read the Maxwell transcript to the second grand jury, did not hear Maxwell’s testimony. It is impossible to know from the written record if Brennan purposefully altered the tone, character or nature of the testimony, Troiano argued.

In a fifth and final argument, the defense alleged the state failed to present exculpatory evidence to the grand jury. Exculpatory evidence, or evidence favorable to defendants that might help exonerate them, must be presented to a grand jury if prosecutors are aware of it, the defense argued.

Troiano argued the state should have told grand jurors of a recording and letter the defense provided to prosecutors, in which Maxwell claims the defendant without a doubt worked more than 35 hours a week.

Four other individuals’ interviews with investigators were misrepresented to the grand jury by Brennan, the lead detective, the defense argued.

Hope Pinto, Wildwood’s HR director; Jeanette Powers, the city’s chief financial officer; Susan Plaza, the municipal accountant, and Rachel Fleck, the assistant municipal treasurer, did not say Troiano worked less than a 35-hour work week, as Brennan represented to grand jurors, Troiano argued.

He said Pinto classified him as full time in her handwritten markings on payroll printouts and said she saw him at City Hall every day; Powers said he was always at City Hall, that she would hear him, and that he would often hold meetings; Plaza never indicated personal knowledge of his hours, that he put in a lot of hours and she would see him everywhere; and Fleck couldn’t attest to his hours because her office was on a different side of the building.

Pelloni, left, with Troiano during a hearing in Cape May County Superior Court in March. Photo Credit: Shay Roddy/File Photo

The State’s Response

Prosecutors from the state Attorney General’s Office, led by Deputy Attorney General Brian Uzdavinis, argued the state offered more than enough evidence for the grand jury to indict the defendant, supporting the allegation that Troiano was not a full-time employee working full-time hours, thus rendering him ineligible for the state benefits.

The state argued it was proper to jointly indict the defendants even if they were not conspiring to defraud the state program. Their time sheets were similar, with the same misreported work hours, the state said. The state’s detective witness also testified to the specific amount Troiano’s alleged crime cost the program, in addition to the specific amounts Mikulski and Byron received, so grand jurors were not prejudiced by the stated $1 million in combined losses, prosecutors argued.

Deputy Attorney General Brian Uzdavinis, the state’s lead prosecutor in the Wildwood health benefits case, at a hearing in March. Photo Credit: Shay Roddy/File Photo

In addressing Troiano’s argument that the portions included in the readbacks for the second grand jury, of witness testimony to the first grand jury, were incomplete, leaving grand jurors on the second panel not fully informed, prosecutors countered that the only testimony not read back was considered unnecessary and duplicative, including introductory remarks, reading of the indictment and instructions on the law.

The state also argued having the detective read the Maxwell testimony was subject to prosecutors’ discretion and permissible under law.

Further, prosecutors argued the state is not required to present evidence to a grand jury unless it is “clearly exculpatory,” meaning it “directly negates the defendant’s guilt.” Prosecutors don’t need to come up with and present a defense, the state argued.

The state said Maxwell gave contradictory statements in different interviews, rendering her testimony about Troiano’s hours worked not credible. Mainly because she lacked credibility, the state said it determined it would not call her as a witness again for the second grand jury.

The state also argued that it accurately represented the statements of Pinto, Powers, Plaza and Fleck to the grand jury. Pinto told Brennan, the detective, that Troiano and commissioners did not work set hours, Powers told investigators the co-defendants were never seen on a regular basis, Plaza said she typically saw Troiano in the afternoons, and Fleck said she considered the mayor and commissioners part-timers because they weren’t present at City Hall during regular business hours or worked full-time regular hours, according to the state’s argument.

Judge DeLury’s Analysis

In his Dec. 8 decision, DeLury highlighted the high burden the defense must clear for an indictment to be dismissed. As long as the state presents “some evidence” establishing a prima facie case that the individual indicted committed a crime, an indictment should not be dismissed, New Jersey case law has established.

The judge determined that joining the defendants in the grand jury presentment was permissible. In his analysis, DeLury stated Troiano, Byron and Mikulski all participated in the same alleged act, misreporting their work hours on each time sheet while employed by the City of Wildwood.

In the 18-page decision, the judge responded to Troiano’s argument that because there was no conspiracy count charged, the matters should have been severed prior to the grand jury presentation. The judge said that is an issue for trial and that the joining was “permissible” for the purposes of the indictment.

DeLury noted that evidence presented to the grand jury against all three co-defendants “consisted of the same witnesses” and that the defendants participated in the same timekeeping practices.

“Given the broad discretion afforded prosecutors in presenting evidence to a grand jury and given the similarity of the proofs involving each defendant, joinder of the defendants for the purposes of the indictment was proper,” the judge wrote in his opinion.

DeLury found that informing jurors of the total amount – over $1 million – of unauthorized funds expended as a result of the three co-defendants’ enrollment in the program, in addition to breaking it down by defendant, was not “unduly prejudicial” to Troiano, who accounted for a little more than a quarter of the benefits paid out in the case.

The judge also found the state’s redactment of certain portions of Maxwell’s testimony to the prior grand jury panel before offering the transcripts of her testimony to the second grand jury was not improper. All information needed, establishing some evidence of each element of the crime, to return an indictment was presented to the grand jury, the judge ruled.

DeLury’s decision was announced on Dec. 8. Photo Credit: Shay Roddy/File Photo

He also found that the indictment should not be disturbed on grounds the grand jury was not given an opportunity to ask questions after each witness. The state asked grand jurors at the end of the testimony in the July grand jury proceeding if there were any questions regarding the facts and evidence presented that day, informing them of their opportunity to ask legal questions or request additional instructions, DeLury wrote.

In response to Troiano’s argument that the detective witness should not have been the one to read back Maxwell’s transcript, the judge found Troiano’s argument “unavailing.”

Finally, DeLury addressed Troiano’s argument that the state did not uphold its duty to present clearly exculpatory evidence to the grand jury, writing “it is not the job of the prosecutor to construct a case for the accused or search for evidence that would exculpate the accused.”

Under New Jersey case law, “clearly exculpatory” evidence must directly negate the guilt of the accused, the judge wrote, “such as the credible testimony of a reliable and unbiased alibi witness, or any unquestionably reliable physical evidence showing that the defendant did not commit the alleged crime.”

Maxwell’s statements to state investigators, a private defense investigator and her sworn testimony were inconsistent, in the state’s view. Her varying statements and testimony make any statement she made that Troiano did work the requisite 35-hour work weeks fall short of the “clearly exculpatory” standard, the judge found.

DeLury noted that Maxwell may or may not be a help to the defendant’s case before a trial jury, but that her testimony “is not evidence that ‘squarely refutes an element of the crime in question.’”

The other City of Wildwood employees – Pinto, Powers, Plaza and Fleck – gave statements regarding Troiano’s schedule and work habits that the defense highlighted, but that the judge found did not amount to exculpatory evidence.

“The defense belabors the point that no one stated defendant did not work 35 hours per week. However, the defense fails to show that any witness asserted that the defendant worked 35 hours a week as required for full-time employment,” the judge wrote. “The factual details and reasonable inferences that may be discerned from such are matters for trial.”

Troiano is due back in court in January.

Contact the author Shay Roddy, at sroddy@cmcherald.com or 609-886-8600, ext. 142.

Reporter

Shay Roddy is a Delaware County, Pennsylvania native who has always spent as much of his summers as he could at the Jersey Shore. He went to Friends’ Central and is a graduate of the Walter Cronkite School of Journalism at Arizona State University.

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