Federal Indictments For Two Executives of Sports Equipment Company

Two former executives of a Pennsylvania company that reconditioned football equipment for many New Jersey school districts and youth sports leagues have been indicted by a federal grand jury on fraud charges, federal officials said Wednesday.

U.S. Attorney Paul J. Fishman announced the former chief executive officer of Circle Systems, Alan Abeshaus, 79, of Highland Beach, FL, and former chief financial officer Mitchell Kurlander, 52, of Allentown, PA, directed "a long-running fraud against schools in New Jersey and elsewhere."

Former president David Drill pleaded guilty to fraud charges in December 2008, admitting that his company participated in fraudulent business practices, including overcharging schools for services and not conducting safety tests on reconditioned helmets, and misreporting testing data to raise the company's profits.

Drill testified that many school officials were aware of the "scam" and to date more than a dozen school districts around the state have been served with subpoenas related to the investigation, including both Ramapo and Lyndhurst in Bergen County. The in his dealings with Circle System.

The indictment against Kurlander and Abeshaus said they along with Drill and others conducted fraudulent business practices including keeping duplicated payments, submitting fake price quotes, buying school officials gifts and then charging back the costs of gifts and donations in their billing.

In November 2009, when the FBI investigation first came to light, then Westfield High School Athletic Director Ed Tranchina did not receive a federal subpoena with relation to the district's relationship with Circle Systems. Circle Systems was Westfield's long time supplier of sports conditioning gear.

Tranchina said at the time that while the district had a good relationship with Circle Systems in the past, the district was planning to explore changes to the district's supplier of sports conditioning gear. He declined to discuss specifics regarding the case. It is not known if a change was made.

Kurlander and his father-in-law, Abeshaus, 79, were each indicted with one count of mail and wire fraud conspiracy.  Kurlander is also charged with nine counts of mail fraud and 12 counts of wire fraud. 

Kurlander, a part owner of the company, was responsible for "overseeing and managing accounts payable, accounts receivable, billing and the submission of bids and quotes to Circle's customers," according to the indictment.

Abeshaus was "the largest single shareholder" of the company, according to the indictment, prior to the sale of Circle System to Schutt Holdings, Inc. in September 2005.

Kurlander and Abeshaus surrendered this morning to FBI agents and the U.S. Department of Education Office of Inspector General.

Both men are expected to appear Wednesday afternoon before U.S. Magistrate Judge Michael A. Shipp in Newark federal court at 2 p.m.