Contractor Admits Paying $70,000 in Kickbacks to N.J. School Official Over Padded Overtime
Kenneth Gratto admitted billing weekend overtime he never worked on Hillsborough school projects and paying the district’s business administrator kickbacks.
A Pennsylvania contractor has admitted paying about $70,000 in cash kickbacks to the former business administrator of the Hillsborough Township School District in New Jersey, in exchange for approval of overtime hours he never worked.
Kenneth Gratto, 55, of Dingman’s Ferry, Pennsylvania, pleaded guilty on Oct. 22, 2026, before U.S. District Judge Robert Kirsch to embezzling more than $156,000 from the school district, the U.S. Attorney’s Office for the District of New Jersey said. He agreed to forfeit about $156,150.
The former administrator, Aiman Mahmoud, still faces charges, and those allegations have not been proven in court. He is presumed innocent.
A construction project and a site supervisor
Mahmoud was the district’s business administrator from 2008 through the end of 2021 and helped oversee a multimillion-dollar project, approved by a 2019 referendum, to upgrade school buildings and build a new school, prosecutors said. The district has more than 7,000 students in nine schools, according to the May 2026 indictment of both men.
In early 2021, Mahmoud asked one of the project companies to hire Gratto as a site supervisor to coordinate work and handle safety oversight, the indictment says. Gratto was paid $100 an hour for regular time and $150 an hour for overtime, and the district reimbursed the company, according to the indictment.
Weekends he never worked
Gratto admitted that through the second half of 2021 he regularly claimed more than 12 hours of overtime on both Saturdays and Sundays, even though he did no work on those days, prosecutors said. Mahmoud approved the timesheets.
After he was paid, Gratto withdrew Mahmoud’s share in cash, put it in an envelope and left it at a place Mahmoud chose, usually in Mahmoud’s unlocked school vehicle, according to the U.S. Attorney’s Office. The indictment says Mahmoud sometimes texted him instructions on where to deliver it.
Hours that could top 24 a day
The indictment also describes a second company that hired Gratto for HVAC work in about October 2021. It says Mahmoud asked that company to pay Gratto in lump sums rather than submit timesheets, which would have shown Gratto claiming hours for both companies that potentially exceeded 24 hours a day. That company made three lump-sum payments totaling more than $107,000 for work between mid-October and late November 2021, according to the indictment.
What happens next
The embezzlement charge carries up to 10 years in prison. Gratto’s sentencing is scheduled for March 4, 2027. The FBI, Homeland Security Investigations and the Somerset County Prosecutor’s Office investigated the case.
