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Attorney Matthew O'Donnell, the state's cooperating witness in a public corruption sting operation.

Holmdel will sue state to recover local funds paid to AG’s cooperating witness

Tax appeal attorney Matt O’Donnell paid over $6.5 million by public entities since he began cooperating with prosecutors in 2018

By David Wildstein, July 14 2021 12:03 pm

The Holmdel Township Committee is preparing to file a lawsuit against the state seeking a return of hundreds of thousands of dollars in legal fees paid to the law firm of Matthew O’Donnell, the state’s cooperating witness in a public corruption sting operation, the  New Jersey Globe has learned.

O’Donnell began cooperating with the state attorney general in early 2018 and entered into a plea agreement with prosecutors of that year.

But the state allowed O’Donnell and his firm, O’Donnell McCord, to continue billing public entities for tax appeal work– about $6.5 million since his first meeting with prosecutors – as he assisted the attorney general’s office in an operating that has so far netted just a handful of small fish.

Holmdel is the first of O’Donnell’s nearly two-dozen public entity clients to argue that they lost revenue as a result of the attorney general’s secret and extended investigation, a local government source confirmed.

“We’re looking to protect the Holmdel taxpayers, whose money may have been stolen from us,” said Mayor Gregory Buontempo.

O’Donnell billed Holmdel $122,482 in 2018 and $97,380 in 2019, records show.

He agreed to plead guilty to one count of second degree Conspiracy to Commit Misconduct by a Corporate Official and forfeit $600,00 he made through an elaborate scheme that used illegal straw donors and cash contributions to obtain lucrative taxpayer-funded legal contracts.

The state will recommend that O’Donnell serve eight years in a state prison, according to a plea agreement obtained by the New Jersey Globe through a document request from the state judiciary.

But prosecutors and O’Donnell also agreed that the forfeiture amount would be “be subject to an upward revision to account for prospective profits that the defendant derives from illegal activities occurring after the date of this agreement but in connection with his cooperation.”

In an executive session last night, Holmdel retained Jerry Dasti, an Ocean County attorney, to represent them.

O’Donnell’s ability to continue practicing law sometimes precluding other firms from obtaining the work.

In March, Attorney General Gurbir Grewal has moved to seal court records in a motion to dismiss an indictment against a former Hudson Council official, augmenting the mysterious circumstances related to O’Donnell.

Superior Court Judge Mitzy Galis-Menendez sealed a list of potential targets in a state corruption probe, including a list of individuals cooperating witness Matthew O’Donnell offered to contact and a list of people prosecutors asked O’Donnell to connect with.

Prosecutors acknowledged in an April court hearing that there are ongoing investigations related to a cooperation agreement.

The New Jersey Globe first reported in December 2019 that an anonymous whistleblower contacted law enforcement in June 2017 about allegations that O’Donnell and his former law partner, Elizabeth Valandingham, used straw donors to funnel money to local candidates he was pitching for tax appeal work.

Valandingham has pled guilty, and some of the straw donors have been admitted into a pre-trial intervention program.

So far, O’Donnell’s cooperation has not netted the state all that much.

Galis-Menendez  dismissed the indictment against former Assemblyman Jason O’Donnell (D-Bayonne)

Charges are still pending against former Morris County Freeholder John Cesaro, former Jersey City Board of Education President Sudhan Thomas, and former Mount Arlington Councilman John Windish.

Mary Dougherty, a 2018 candidate for Morris County Freeholder, admitted to an election reporting violation and was given one-year on probation.

State Sen. Joseph Cryan (D-Union), a former Democratic State Chairman, strongly criticized Grewal for allowing O’Donnell to continue to charge taxpayers after becoming aware of still unnamed illegal acts.

“The NJ Attorney General let a criminal run around our state to commit more criminal acts. worse, a lawyer who happens to be a criminal, and place taxpayers in jeopardy,” Cryan said on Twitter.  “This embarrassment needs to end.”

This story was updated at 12:42 PM to include comment from Buontempo and at 1:19 PM with comment from Cryan.

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