Federal judge postpones O'Grady imprisonment 'Bid Rig' update: Merla trial moved to Dec. 12; Coughlin now serving BY KAREN E. BOWES Staff Writer Raymond O'Grady NEWARK - Former Middletown Committeeman Raymond O'Grady was granted an emergency appeal last week, allowing him to stay out of jail for at least another week. On Nov. 21, O'Grady's attorney, Kevin Roe, filed a last-minute motion in federal court, asking that this client be allowed to remain under house arrest pending his upcoming appeal. Convicted in June on five counts of government corruption, including accepting $8,000 in cash bribes, O'Grady was caught on tape accepting envelopes allegedly filled with cash and boasting to undercover FBI agents posing as criminals about his ability to "smell a cop from a mile away." In February 2005, O'Grady was arrested in a federal sting along with 10 other government officials from throughout Mon-mouth County. A Middletown committeeman at the time of his arrest, O'Grady worked as the director of the Monmouth County Central Motor Pool. Roe based his appeal on the suicide attempt of the FBI's top witness during O'Grady's June trial. Roe argued that Anthony Palughi, O'Grady's friend turned FBI informant, was not mentally fit to return to the witness stand after swallowing over 60 blood pressure pills in an attempt to take his own life John Merla U.S. District Judge William Martini initially denied the motion, saying the case contained an overwhelming amount of evidence, with or without Palughi. But that decision was overturned on Friday, according to U.S. Attorney's Office spokesman Michael Drewniak. Third District Federal Appeals Court Judge D. Brooks Smith, Philadelphia, ruled to allow the appeal, which would mean holding a special hearing to determine if Palughi was mentally fit to testify. Set to begin his prison sentence on Nov. 28, the ruling will allow O'Grady at least a few more days of freedom until the matter is settled. "The third circuit is in Philadelphia," Drewniak said on Monday. "He asked for and was granted an emergency appeal." "We have to file our responsive papers to that, to the defense's motion to have it stayed," Drewniak continued. "We must have our response in by 3 [p.m.] on Thursday." Paul Coughlin How long will this process take? According to Drewniak, it's anybody's guess. The judge could deny it with a one-page decision, he said, or the matter could take several weeks. Merla trial pending Postponed five times since the spring, the trial of sitting Keyport Mayor John Merla was recently rescheduled once again, this time for Dec. 12. "That is the current schedule," Drewniak confirmed on Monday. Merla was first charged on Feb. 22, 2005, with extortion under color of official right. He was indicted on Oct. 3, 2005, on four counts of accepting corrupt payments, conspiracy to obtain corrupt payments under color of official right and two counts of mail fraud. A superseding indictment on Feb. 6, 2006, added one count of extortion induced by fear of economic harm under color of official right. Merla has vigorously maintained his innocence since his arrest and has said he plans to fight all of the charges in court. Merla has remained the mayor of Keyport, and refused calls to step down. Coughlin serving time Meanwhile, former Hazlet Mayor Paul Coughlin has begun his sentence for his role in Operation Bid Rig. Coughlin, 42, who pleaded guilty to one count of accepting corrupt payments on May 30, has begun to serve his time at the Morgantown Federal Corrections Institute in West Virginia, according to the federal Bureau of Prisons Web site. Coughlin is scheduled to be released from the all-male minimum security facility on July 30, 2008, according to the Bureau of Prisons. However, upon sentencing, his attorney Jerome Ballorotto said he could be released after serving as few as 10-12 months.