Fishing with Dad

Toms River Regional Superintendent Michael J. Ritacco was at the center of one of the costliest public corruption schemes in recent New Jersey history, taking between $1 million and $2 million in bribes from the school district’s insurance broker, federal authorities said Thursday.

In return for the payments, Ritacco, 62, used his influence as superintendent of the state’s fourth-largest school district to ensure that the broker, Francis X. Gartland, was able to maintain his multimillion-dollar insurance contracts with the district, officials said.

Ritacco took part in a “scheme that was staggering in its magnitude and scope,” U.S. Attorney Paul J. Fishman said. “No matter what one’s position or title, every corrupt official has real victims and in this case, the defendants’ alleged conduct cost the citizens of Toms River more than a million dollars.”

Federal officials charge that Gartland inflated insurance service prices in the district to pay for the bribes from 2002 to April 2010. Gartland no longer has contracts with the district.

But one of Ritacco’s lawyers, William J. Hughes Jr., said his client “categorically denies any wrongdoing” and “looks forward to his day in court.”

“The government is wrong in this case,” Hughes said. “We are prepared, and we will go forward with an aggressive defense. We believe this will be a victory, and we will restore his good name.”

According to Fishman, the scheme included payments made to Ritacco by Gartland, Frank Cotroneo, who served as health insurance co-broker for the district, and an unnamed individual who provided employee assistance services and administrative service for the district’s worker’s compensation plan.

An 18-count federal indictment Thursday charges Ritacco and Gartland with fraud, bribery and other related offenses from 2002 to April 2010.

In some cases, the payments also directly benefited a woman described in the indictment as a district employee “the manager of the district’s cafe located at the district’s administration offices,” who was also Ritacco’s girlfriend.

The manger of the district’s cafe is Donna Mansfield. Her home was raided by the FBI in April, along with Ritacco’s home. She could not be reached for comment. She has not been charged with any wrongdoing.

Ritacco was paid $234,000 a year as superintendent, one of the highest salaries in the state. At age 62 and with 40 years of service, he could retire on an annual state pension of about $168,000. That pension, though, could be lost if he is convicted.

According to the indictment, bribe payments were used to buy four to six pieces of jewelry Ritacco gave to the employee, and to pay college tuition and living expenses for a relative of the employee. Bribes also came in the form of appliances, the payment of a $5,000 plumber’s bill and two Rolex watches … one for a woman and one for a man … that topped $50,000, according to the indictment.

The Toms River Regional school district has more than 17,000 students and is the largest suburban district in the state with a nearly $200 million budget.

FBI Special Agent-in-Charge Michael B. Ward said the investigation is far from over.

“There is more work to be done in Toms River,” Ward said. Ward said authorities do not believe the insurance corruption scandal is limited to Toms River, and they intend to follow the investigation around the state.

He asked for members of the public to pass on any tips they might have.

The indictment charges that:

—Ritacco and Gartland took a number of steps to cover up the bribery scheme, including setting up bank accounts for sham companies to filter cash from Gartland to Ritacco.

—Ritacco also had former Toms River Regional administrator Frank D’Alonzo and another long-time friend of Ritacco’s pay him in cash to avoid discovery during audits and instructed the friend not to discuss the transactions on cell phone conversations. Ritacco also suggested that they use code words and be paid in amounts that would not trigger attention from banking authorities.

—Ritacco lied on his financial disclosure statements and hid a secret stash of cash in safe deposit box kept at a Naples, Fla., bank.

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Last Thursday, Sen. Chuck Schumer of New York gathered members of the the Long Island fishing community to meet with Dr. Jane Lubchenco, regional administrators for the National Oceanic and Atmospheric Association (NOAA).

Schumer told the crowd gathered that the current summer flounder regulations in New York had “put the industry on death’s door,” and urged the NOAA Administrator to work to secure the best available science for the entire recreational industry.

“Nobody wants to see overfishing, but they want to see the science done in a rational way,” the senator said in his opening remarks. He went on to support the Mid-Atlantic Marine Fishery Council’s (Council) Science and Statistical Committee (SSC) and Monitoring Committee’s (MC) newly recommended acceptable biological catch recommendations of between 32 and 34 million pounds of fluke, which are being presented before the Council this week.

“We need more quota for 2011,” Schumer told Dr. Lubchenco, who pledged to do what she could to support the senator’s request. The SSC and MC also issued recommendations for increasing the allowable catch of porgy in 2011 from anywhere between 15 percent to nearly 200 percent.

Schumer joined Congressman Frank Pallone (D-NJ) as a key sponsor of the Flexibility in Rebuilding in Fisheries Act, which calls for latitude in the strict rebuilding deadlines on fishing stocks imposed by the Magnuson-Stevens Act.

In Dr. Lubchenco’s opening remarks, she said her administration was “guided by scientific information — guided by the rule of law, Magnuson-Stevens.”

That comment must have struck Jim Hutchinson, managing director for the Recreational Fishing Alliance, as particularly troublesome, considering NOAA’s failure to adhere to certain provisions of Magnuson-Stevens.

According to the reauthorization of Magnuson-Stevens, the Marine Recreational Statistics Survey (MRFSS) was to have been replaced as a data gathering tool in 2009.

And yet it remains.

“By Dr. Lubchenco’s own account, we’re not going to see any improvement to our recreational harvest data for at least another year, which means NOAA Fisheries is in violation of federal law,” Hutchinson said.

The RFA believes there’s no reason not to allow for substantial increase in quotas in 2011 for summer flounder and scup.

“In light of what we just heard from NOAA’s chief regarding another season of missing angler data, getting maximum allowable catch is the fairest approach considering the noted lack of improved science,” Hutchinson said. “We’re bound by a fatally flawed system once again.”

More information on 2011 quotas for summer flounder and scup will be coming in Friday’s Hook, Line and Sinker.

For those anglers anxiously awaiting the arrival of warm-water species like false albacore and Spanish mackerel, Giglio’s Bait and Tackle in Sea Bright will help you get ready with a seminar on catching albies this Saturday.

All those interested are invited to meet at 7:30 a.m. in the Sea Bright Municipal Lot on Ocean Avenue. Once assembled, the group will move to the beach. The guest speaker will be veteran fisherman Chuck Kababick, of Long Branch.

Lou Marucci of the Knee Deep Fishing Club at Lake Hopatcong reported the winner of the club’s Catfish Derby was Jim Archambault, Hopatcong, with a 16-pound channel catfish that was worth $416 in prize money.

John Oswald

The head of the world’s biggest bond fund, bemoaning the slow economic recovery, reignited debate Tuesday by publicly supporting a massive new refinance program currently roiling the mortgage bond market by describing it as a form of fiscal stimulus that wouldn’t add to the deficit.

Bill Gross, who runs Pacific Investment Management Co.’s $239 billion Total Return Fund, said that policymakers “should quickly re-engineer” a plan that would refinance all non-delinquent mortgages backed by the federal government. The rate on a 30-year fixed-rate mortgage averaged a record-low 4.44 percent in the week ending Aug. 12, according to taxpayer-owned mortgage giant Freddie Mac.

Taxpayers guarantee the mortgages of 37 million households, or two-thirds of all homeowners with a mortgage, according to a July 29 note by David Greenlaw, Morgan Stanley’s chief U.S. fixed-income economist. That includes government agencies like the Federal Housing Administration as well as twin behemoths Fannie Mae and Freddie Mac. Greenlaw estimates about 18.5 million taxpayer-backed mortgages are at rates higher than 5.75 percent interest.

By refinancing those mortgages at current, lower rates, Greenlaw believes those homeowners would save $46 billion a year. Gross said the refi scheme would spur some $50-60 billion a year in new consumer spending and raise home prices between 5-10 percent. Forecasters, including Fannie Mae, say home prices are set to decline the rest of the year and into 2011. Former Federal Reserve Chairman Alan Greenspan said this month that a so-called double-dip recession is possible “if home prices go down.”

In theory, the proposal would immediately help those homeowners, as they’d save on their monthly mortgage payment, and it could help the broader economy because homeowners could take the savings and spend it, spurring growth. And because homeowners — particularly those who owe more on their mortgage than their house is worth — would have more affordable payments, less of them would fall behind and face foreclosure, stabilizing the housing market and leading to an uptick in prices.

“It’s the last real big thing that an administration can do that’s caught between a Republican and Democratic orthodoxy and the inability to legislate — certainly in front of the election, and maybe even afterwards as we have more evenly balanced constituents in Congress,” Gross told the Huffington Post during a brief interview in between sessions at the administration’s Conference on the Future of Housing Finance, held at the Treasury Department in Washington. “It’s the one thing they can do that doesn’t increase the deficit and that doesn’t require legislation.”

“[W]e are not recommending any change to the qualification for new mortgages — only refis,” Greenlaw wrote in his note. “Thus, there is no subsidy involved, and credit quality actually improves somewhat due to the lower payment burden. This implies fewer foreclosures going forward and less credit risk for the guarantor of the mortgage (i.e., the U.S. government).”

Government officials have dismissed the idea.

Gross said that putting the idea into practice — Morgan Stanley’s Greenlaw called it “Slam Dunk Stimulus” in his note — would “balance the scales” between “Main Street” and “Wall Street.”

“I just don’t think the administration recognizes the problem this economy is in and what’s required,” Gross said. “Certainly the Fed recognizes the problem. I mean, [the administration] knows they can’t put forth another stimulus package, so what can they do? This, to me, is something they can do.

“It’s a question of Wall Street and Main Street — which side do you favor? I’d say that Wall Street has been favored enough over the past year and a half, so let’s give Main Street a chance,” Gross continued. “The administration needs to get back on Main Street and off of Wall Street, and I think this is one big step that they can do.”

But it’s more than just a Wall Street versus Main Street issue. Investors in mortgage-backed securities — like pension funds, unions and retail investors — would be hurt by the program. And over the long term, so could homeowners.

Mortgage refinancings involve paying off an old mortgage and taking on a new one with better terms, like a lower rate. Investors who own bonds backed by home loans with 7 percent interest, for example, would essentially lose out on that extra income. Also, wiping out those higher-rate mortgages that back bonds that are trading above par — meaning their current price is above face value — would rob investors of that additional gain.

Banks that own those securities would also lose out on that income, as would asset managers and other large investors in mortgage-backed bonds, like the Chinese government, Gross said. Fannie and Freddie, which have tens of billions of dollars in mortgage holdings in their portfolio, would also suffer from that loss of income. PIMCO, too, Gross said.

“At PIMCO, we’d be affected by $3 or $4 billion in terms of a refunding loss,” Gross said. “But I’m here as a public advocate, not as a private [investor]. When I go back to Newport I’ll be back to managing that portfolio.” PIMCO is based in Newport Beach, Calif.

Homeowners could end up losing too, said Joshua Rosner, managing director at independent research consultancy Graham Fisher & Co.
“As a result of another prepayment-shock and the inability to model future prepayment shocks, investors would become even more unwilling to invest in [mortgage-backed securities] going forward, or would begin to demand higher yields going forward,” Rosner wrote on the popular finance and economics-focused blog, The Big Picture. The prepayments — refinancings lead to old mortgages being paid off — would cost investors “more than half a trillion [dollars] in lost interest income,” he wrote.

A loss of investors in mortgage-backed securities would lead to higher rates of return, or yield, in order to lure them back. Higher yields on mortgage bonds would lead to higher interest rates for borrowers.
In other words, the gain from the Fannie and Freddie-backed refi scheme could be wiped out by the higher yields investors could demand.

Rosner also said that the move “could precipitate a systemic risk issue.” Since banks and Fannie and Freddie would have to hedge their positions to these new record-low rates, they’d likely do it simultaneously. (Rates will undoubtedly rise from their record lows, leading banks to pay more to get money to fund loans while fixed-rate mortgages pay them a steady rate.) That push could cause enormous damage to the financial system, Rosner wrote.

Thomas A. Lawler, a former top official at Fannie Mae now a consultant on housing and mortgage matters, said that homeowners’ potential savings were overestimated.
There are substantial upfront costs associated with refinancing a mortgage, Lawler wrote on another popular finance and economics-focused blog, Calculated Risk.

While Gross said the costs could be rolled into the mortgage, Lawler wrote that the costs were so high that they could negate the savings many homeowners had hoped for.
For example, Freddie Mac already discloses that fees add an additional 0.7 percent interest to the mortgage. Lawler estimated that the costs associated with refinancing — underwriting fees, taxes, insurance and others — could add an additional 1 percent to the rate.

So if the average mortgage fetches about a 4.5 percent interest rate, that additional percentage point brings it pretty close to the median on outstanding 30-year fixed-rate mortgages, which Morgan Stanley estimates to be 5.75 percent.

Lawler also raises concerns over implementation — particularly considering the many difficulties the Obama administration has run into with its other foreclosure-prevention initiatives — and the fact that the administration already has a refinance program for essentially the same borrowers that Gross wants to help.

The Home Affordable Refinance Program, otherwise known as HARP, aims to do the same thing — take homeowners with taxpayer-backed mortgages and refinance them into lower rates. Through May, about 350,700 homeowners have benefitted from the program, according to the latest data from Fannie and Freddie’s regulator, the Federal Housing Finance Agency.

Morgan Stanley said as many as 18.5 million homeowners could benefit from a new program. HARP was launched in April 2009.
But to Gross, the benefits of the program outweigh the potential costs, which he termed “marginal arguments.”

“The American economy is approaching a cul-de-sac of stimulus — both monetarily and fiscally,” Gross told the crowd at the Treasury Department, “which will slow to a snail’s pace, incapable of providing sufficient job growth going forward.

“Unemployment rates will approach and remain at double digits unless positive fiscal stimulus is provided in the next six months.”

Shahien Nasiripour

Women who drink beer regularly are more likely to develop the skin disease psoriasis, a US study suggests.

The study found that women who drank five beers a week doubled their risk of developing the condition compared with women who did not drink.

The Boston study, in Archives of Dermatology, looked at more than 82,000 female nurses aged 27 to 44 and their drinking habits from 1991 until 2005.

Non-alcoholic beer, wine and spirits were not found to increase the risk.

In the study, researchers said that woman who drank more than two alcoholic drinks a week increased their risk of psoriasis by two-thirds compared with non-drinkers.

For women who drank five glasses of beer per week their risk of developing psoriasis was 1.8 times higher again.

When stricter criteria were used to confirm psoriasis cases, their risk was increased 2.3 times.

Yet women who drank any amount of low- or non-alcoholic beer, white wine, red wine or spirits per week were not found to be at increased risk.

Barley content

Author Dr Abrar Qureshi, from Harvard Medical School, Boston, wrote in the journal: “Non-light beer was the only alcoholic beverage that increased the risk of psoriasis, suggesting that certain non-alcoholic components of beer, which are not found in wine or liquor, may play an important role in new-onset psoriasis.”

The study suggests that it could be the gluten-containing barley, used in the fermentation of beer, which is the cause of the increased psoriasis risk.

Previous studies have shown that a gluten-free diet may improve psoriasis in patients who are sensitive to gluten.

People with psoriasis may have a so-called latent-gluten sensitivity, compared with people without psoriasis, says the study.

“Women with a high risk of psoriasis may consider avoiding higher intake of non-light beer,” the authors conclude.

Psoriasis is a chronic skin disease characterised by itchy red scaly patches that most commonly appear on the knees, elbows and scalp but can show up anywhere, including the face.

The effects can range from mild to disfiguring enough to be socially disabling.

Courtesy of BBC News

BRISTOL, CONN. — As Toms River National’s Russell Petranto squeezed his glove with Michael Bliss’ pop up, he closed out an impressive run to the Mid-Atlantic Regional title for the Little Leaguers from Toms River.

Petranto’s defensive play finished off Pennsylvania’s Council Rock-Newtown as Toms River National won 8-5 on Monday night.

It marked the fourth time a Little League squad from Toms River won a regional and it marked the 10th time a team from New Jersey will represent a region in the Little League World Series.

Toms River National will play at 11 a.m. Saturday in Williamsport, Pa., in its Little League World Series opener against Great Lakes champion West Side American Little League from Hamilton, Ohio.

Toms River National starting pitcher Jeff Ciervo went five innings, struck out five and walked none, leaving with an 8-4 lead. He also had the go-ahead RBI with his double in the bottom of the second that put Toms River ahead 5-4.

His strong outing was backed by some solid defensive plays in the field.

In the top of the first, left fielder Johnny Lazzaro made a catch against the fence to prevent a potential home run by Pennsylvania’s James Closser. In the top of the fifth, right fielder Billy Lumi made a diving catch to his right on the warning track to take away extra bases from Noah Hartwell, who had smashed a two-run home run to right off Ciervo in the first.

The game was a rematch of each team’s opening game in the regional tournament. Pennsylvania won that game, 10-6, but with much more on the line on Monday night, Toms River avenged that defeat and will go to Williamsport, where the 1998 Toms River East American team came back with the World Series title.

After that loss to Pennsylvania in the opener, Toms River won five straight games to clinch the regional title.

Toms River once again flashed the home run stroke that has powered its summer to Williamsport.

Patrick Marinaccio launched a solo home run to right field to make it 6-4 after four innings and Michael Tiplady hit a two-run home run to left to make it 8-4 after five innings.

Sherlon Christie

DEAL — Dive teams are preparing to restart search efforts along the Monmouth County coastline for a Long Island man who disappeared while swimming off an unguarded, off-limits beach area off Ocean Lane, police said.

“We still have not found him, but State Police helicopters are searching the beachfront and we alerted all the shore towns in Monmouth County about the missing swimmer,” said Police Chief Steven Carasia, who added there were concerns about the weather and rough seas.

A dive team from the Monmouth County Sheriff’s Office was preparing to enter the waters again this afternoon in search of 30-year-old Joshua Nevarez of Amityville, N.Y. who was swimming with a female friend at the unguarded and off-limits beach area shortly before 4:30 p.m. Saturday, when he apparently tired and slipped below the surface, Carasia said.

The unidentified female friend unsuccessfully tried to pull Nevarez ashore. She was rescued by Rachel Rosenthal, of Long Branch, a bystander at the beach; Nevarez was last seen when he slipped below the surface, Carasia said.

Coast Guard, State Police and county dive teams have been searching the area since Saturday, but weather has hampered search efforts with rough seas making underwater search efforts dangerous.

The National Weather Service issued a warning this morning for a moderate risk of rip currents in the ocean waters off New Jersey and Delaware today, with waves expected to be 3 to 4 feet high.

Charles Webster