June 30, 2010 - For immediate release:
Three Contractors for Hospital Also Indicted in Commercial Bribery Scheme
SALEM - A former Associate Vice President for Beverly Hospital has been indicted in connection with using contractors involved in the hospital's renovation to pay his personal bills and to perform extensive renovations on his home, Attorney General Martha Coakley announced today. He was also indicted in connection with stealing several valuable antique items from the hospital.
Paul Galzerano, age 58, of Groveland, has been indicted by an Essex County Grand Jury on charges of Commercial Bribery (3 counts) and Larceny over $250 (4 counts).
Three contractors were also indicted today in connection with helping Galzerano with his scheme. Brian Lemay, age 53, of Andover, and John Kane, age 51, of Hanover, are each charged with Commercial Bribery. Lemay and Alfred Cunsolo, age 52, of Methuen, are each charged with Larceny over $250. In December 2008, the Attorney General's Office began investigating Galzerano's activities after the matter had been referred by the hospital.
"We allege that this defendant abused his position of trust at the hospital to steal valuable merchandise and execute an elaborate kickback scheme to have thousands of dollars of work performed at his home," AG Coakley said. "At a time when health care costs are at a premium, we allege that this defendant put his own personal interests ahead of the interests of the hospital. We thank Beverly Hospital for their full cooperation throughout this investigation."
COMMERCIAL BRIBERY CHARGES
Between 2003 and 2006, while employed as Associate Vice President of Support Services at Beverly Hospital, Galzerano oversaw a major multi-million dollar renovation of the hospital's facilities. Galzerano repeatedly solicited and received kickbacks and bribes totaling nearly $500,000 from contractors working on the renovation. Authorities allege that the kickbacks to Galzerano ensured that the contractors would be granted lucrative contracts to do renovation work on the hospital. Lemay owned a large company that specialized in HVAC services for hospital construction projects and Kane had a general contracting business that specialized in medical facilities construction. Cunsolo owned a small general contracting company that did some renovations in different areas of the hospital. Galzerano and Lemay allegedly would inflate the prices of proposals submitted for hospital work, and the difference in the inflated costs would be paid back to Galzerano as payments for his personal bills. Lemay provided kickbacks to Galzerano in the form of approximately $270,000 in payments to Galzerano's personal credit card bills and mortgage payments. Investigators also discovered that some of the contractors performed various renovations at Galzerano's residence free of charge in return for favorable consideration in future hospital contracts. Kane allegedly performed and paid for substantial landscaping, painting, and other work done at Galzerano's property totaling more than $70,000. In addition, investigators discovered the Galzerano hired another hospital contractor, Cunsolo to perform driveway work at his house. Galzerano then allowed Cunsolo to bill the hospital approximately $10,000 for the driveway work, which Galzerano approved for payment.
In the course of the hospital's renovations, Galzerano arranged for antiques and paintings that had been previously donated to the hospital to be moved to storage. Investigators discovered that during the hospital's renovation, Galzerano moved a century-old grandfather clock and two valuable paintings to his home. When the hospital's renovation was complete, the items were missing and never returned to the hospital. Investigators also discovered another instance in February 2006, where Galzerano purchased several antiques at a local store claiming to the store owner and hospital employees that the items were purchased for the hospital. Galzerano had the store bill the hospital for these purchases, and in order to pay for these items, Galzerano allegedly asked one of the hospital's vendors to pay the store. These items never arrived at the hospital when the renovation was completed. In 2008, hospital employees saw pictures of some of these missing items in a newspaper's online real estate listing for Galzerano's home. A search warrant was executed at his house and the Groveland police recovered several of the missing items belonging to the hospital. The total value of the stolen antiques and paintings is approximately $25,000.
An Essex County Grand Jury returned sealed indictments against Galzerano on March 26, 2010, in connection with the antique thefts. Those indictments were unsealed today following the additional indictments returned by the grand jury against Galzerano, Lemay, Kane and Cunsolo for the commercial bribery scheme.
The case is being prosecuted by Assistant Attorneys General David Waterfall and Marc Jones, both of AG Coakley's Corruption and Fraud Division, and was investigated by financial investigator Jessie Dean and members of the Massachusetts State Police assigned to the Attorney General's Office. The Essex County District Attorney's Office and the Groveland Police Department also assisted with the investigation. Beverly Hospital cooperated fully with the investigation.