A former Hillsborough Township School District worker has admitted to paying approximately $70,000 in cash kickbacks to the district’s former business administrator as part of a fraudulent overtime scheme that siphoned more than $156,000 in public funds.
Kenneth Gratto, 55, of Dingman’s Ferry, Pennsylvania, pleaded guilty Thursday before U.S. District Judge Robert Kirsch to embezzling, stealing, and fraudulently obtaining more than $156,000 in school district funds.
According to court documents and statements made in court, Aiman Mahmoud, who served as the district’s business administrator from 2008 through 2021, helped oversee a multimillion-dollar school construction and renovation project approved by voters in a 2019 referendum.
Mahmoud arranged for Gratto to work as a site supervisor and owner’s representative on portions of the project. Shortly after hiring Gratto, the two agreed that Gratto would pay Mahmoud cash kickbacks in exchange for approving timesheets that substantially inflated his overtime hours.
Gratto billed companies involved in the project at $150 per hour.
During the second half of 2021, Gratto routinely submitted timesheets claiming more than 12 hours of overtime on Saturdays and Sundays, even though he had not worked those days.
After receiving paychecks from the companies, which the school district reimbursed, Gratto deposited the checks and withdrew cash to pay Mahmoud. He delivered the kickbacks in envelopes at locations Mahmoud selected, typically inside Mahmoud’s school vehicle.
Gratto admitted to embezzling approximately $156,150 through the scheme and agreed to forfeit that amount as part of his plea agreement.
He faces a maximum sentence of 10 years in prison and a $250,000 fine. Sentencing is scheduled for March 4, 2027.