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TRENTON
– Attorney General Paula T. Dow and
Criminal Justice Director Stephen J. Taylor
announced that the owner of a Paulsboro-based
heating oil company was sentenced to prison
today for defrauding the New Jersey Home
Energy Assistance Program of nearly $400,000.
According
to Director Taylor, Thomas J. Harris, 66,
of Woolwich, the owner and sole proprietor
of Harris Fuel Oil, was sentenced to four
years in state prison by Superior Court
Judge M. Christine Allen-Jackson in Gloucester
County. He pleaded guilty on Aug. 10, 2009
to second-degree charges of financial facilitation
of criminal activity (money laundering)
and misapplication of entrusted property
and property of government. He was sentenced
to four years on each charge, with the sentences
to run concurrently.
Harris
admitted that he defrauded the HEA Program
of $399,812 by offering low-income beneficiaries
cash for their state-issued assistance checks
instead of fuel to heat their homes. Harris
paid $247,700.50 to the beneficiaries in
exchange for assistance checks in amounts
totaling $399,812, which he deposited into
Harris Fuel Oil accounts. As a result, Harris
retained over $152,000 in HEA funds for
himself. He must pay $152,100 in restitution
to the New Jersey Department of Community
Affairs, which administers the program with
the assistance of local agencies that it
contracts. As part of his plea, Mr. Harris
is also subject to a lifetime ban on doing
business with the State of New Jersey pursuant
to a consent order executed by the court
on August 10, 2009.
“This
heating oil supplier shamelessly exploited
the low-income beneficiaries of the New
Jersey Home Energy Assistance Program, enticing
them to trade the assistance checks that
were supposed to heat their homes for a
reduced amount of cash, while he pocketed
the difference,” said Attorney General
Dow. “In doing so, he stole from the
state and its taxpayers.”
“We
will continue to aggressively investigate
and prosecute those who engage in this type
of fraud, which drives up the cost of public
assistance programs,” said Director
Taylor.
The
charges resulted from investigations by
the Division of Criminal Justice Corruption
Bureau, conducted with assistance from the
Department of Community Affairs. Deputy
Attorneys General David M. Fritch and Robert
Czepiel prosecuted the case and represented
the state at the sentencing hearing. The
investigations have also resulted in charges
against seven other defendants, including
two local administrators of the HEA program.
Under
the the Low-Income Home Energy Assistance
Program (LIHEAP), one of two programs under
the HEA Program, low-income beneficiaries
who pay heating costs to a fuel oil supplier
receive energy assistance in the form of
two-party checks payable to the head of
the household and their fuel oil supplier,
identified only as “Your Heating Supplier.”
These checks are marked with specific instructions
to the bank that they are only for deposit
by the heating oil supplier.
Harris
Oil was a participating energy supplier
in the LIHEAP program, providing fuel oil
in Gloucester County, but Harris also purchased
benefit checks from beneficiaries, even
those who were not regular customers of
his company. Harris would deposit the HEA
check into his company bank account and
pay the beneficiary a sum less than the
amount of the state check – either
by cash or company check – with Harris
keeping the difference. Investigators learned
that word had spread among HEA beneficiaries
that Harris was engaging in the business
of paying for HEA benefit checks. These
transactions were generally conducted by
Harris while parked in one of his business
vehicles outside his office on West Broad
Street in Paulsboro.
Although
the investigation revealed that Harris was
involved in the fraudulent scheme for five
or six heating seasons, the money involved
grew substantially with the dramatic increase
in the size of HEA checks after fuel oil
costs soared in 2008 and 2009. Investigators
identified 259 specific transactions between
January 2008 and May 2009, representing
$399,812 in HEA funds, where Harris deposited
an HEA benefit check in exchange for a contemporaneous
check written to the HEA beneficiary.
In
related cases, , 24, of
Chester, Pa., a local administrator for
the HEA Program, pleaded guilty on Feb.
24 to official misconduct for stealing $24,010
from the program. She must pay full restitution,
and the state will recommend that she be
sentenced to five years in prison. She admitted
that she used her position as an HEA manager
for Tri-County Community Action Partnership
to process false HEA applications for herself
and five family members. Tri-County Community
Action is a nonprofit contracted by the
state to administer the HEA program in Cumberland,
Gloucester and Salem counties.
and her family members received
a total of $24,010 in benefits for which
they were not eligible, including approximately
$15,000 in HEA checks intended for heating
oil purchases that they traded for cash
from Harris. The five family members were
indicted with on Aug.
17, 2009 and all have since pleaded guilty.
They are responsible with her for paying
back the funds they received.
Another
former local administrator for the HEA program
employed by Tri-County was indicted on May
12, 2010. Nicole Victor, 37, of Paulsboro,
allegedly stole $11,705 in home energy assistance
funds by filing three false HEA applications
and taking the assistance funds issued on
the applications for her own benefit. The
charges in that indictment are pending.
They are merely accusations and the defendant
is presumed innocent until proven guilty.
The
charges in these cases stem from investigations
by the Division of Criminal Justice Corruption
Bureau, conducted with assistance from the
New Jersey Department of Community Affairs.
The investigations were conducted and coordinated
for the Division of Criminal Justice Corruption
Bureau by Lt. Keith Lerner, Sgt. Robert
Ferriozzi, Detective Andrea Salvatini, Detective
Anthony Luyber, Deputy Chief of Detectives
Neal Cohen, Analyst Alison Callery and Deputy
Attorneys General Fritch and Czepiel.
The
New Jersey HEA Program encompasses two separate
programs, LIHEAP and the Universal Service
Fund Program (USF). The USF program assists
low-income households by providing credits
against their natural gas and electric bills.
The Harris case involves the LIHEAP program,
while the and Victor cases involve
both programs.
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