FBI probe that sparked library raid widens to include federal grants

By Jessica Mazzola | NJ Advance Media for NJ.com
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on August 31, 2016

ORANGE — In evidence of a widening federal probe, Essex County has turned over to agents documents related to a grant it distributed to the Orange Public Library, NJ Advance Media has learned.

The FBI raided the library last month in connection with an investigation into its alleged misuse of government funds, according to federal warrants obtained by NJ Advance Media.

About a week ago, officers from the FBI and the federal Department of Housing and Urban Development's investigative arm came to the Essex County Division of Housing and Community Development, requesting documents related to grants and loans to the city and its library, county officials confirmed.

Essex Inspector General Dominic Scaglione said in a phone interview Tuesday that after providing the documents, the county office requested additional meetings with the federal agencies this week, because the Division of Housing and Community Development's director was on vacation during the probe.

"We want to see if there's anything else we can do," Scaglione said.

The $48,000 grant in question, county officials said, was a federal HUD grant to the library that was processed and handed out through the county office.

Essex officials said they previously questioned the use of the grant money, which was awarded in 2014. Through what Scaglione called an "ongoing series of negotiations," Orange returned the entire sum to the county, he said.

The city had spent about $18,000 of the grant, which it repaid from its own budget, officials said. The rest of the grant money had not been spent, and was returned, officials said. The county has since repaid HUD the full $48,000, officials said.

"We weren't satisfied with what was (happening at the library)," Scaglione said of the county's push to have the funds returned. "I think the Orange Public Library people also realized it needed to be returned, because, to the best of my knowledge, it had really not been used."

It is not clear what specifically in the library the grant money was intended for, or what the $18,000 was spent on.

The county, Scaglione urged, is not a target of the federal investigation. It is not involved, other than to provide information related to grant money that passed through its offices, to Orange, officials said.

"The City of Orange Township continues to cooperate with authorities regarding the matter concerning the Orange Public Library," said city spokesman Keith Royster. "The matter has been referred to legal counsel for full cooperation. City government continues to operate, serving the residents of the City of Orange Township."

The FBI and U.S. Attorney's Office have acted on at least two search and seizure warrants this summer related to an investigation of library spending. Agents seized files concerning multiple projects and programs at the library as part of an investigation into a long list of potential violations, including theft of federal government funds, accepting corrupt payments from an agency that receives federal funds, wire fraud, extortion, and money laundering.

The library closed one day earlier this summer during the FBI raid, but has since reopened.

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