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For Immediate Release:
For Further Information:
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January 14, 2011

Office of The Attorney General
- Paula T. Dow, Attorney General
Division of Criminal Justice
- Stephen J. Taylor, Director

Media Inquiries-
Peter Aseltine
609-292-4791
Citizen Inquiries-
609-292-4925

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Three Corporate Officials Indicted for Allegedly Falsifying Records to Overbill Burlington County Under Bus Contracts

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TRENTON - Attorney General Paula T. Dow and Criminal Justice Director Stephen J. Taylor announced that three current and former managers for Laidlaw Transit Services, Inc. have been indicted for deliberately falsifying records in order to overcharge Burlington County approximately $450,000 for bus services.

According to Director Taylor, the Division of Criminal Justice Corruption Bureau obtained a six-count state grand jury indictment charging the following men:

  • Paul O’Brien, 43, of Hillsborough, N.J., District Manager for Laidlaw Transit Services;
  • Richard Miranda, 36, of Universal City, Texas, former Project Manager for Laidlaw; and
  • Reinaldo Monzon, 55, of Hamilton, N.J., former Operations Manager for Laidlaw.

The indictment was returned by the state grand jury on Dec. 13, 2010, but was sealed by court order until today. It charges each defendant with conspiracy (2nd degree), making false payment claims for a government contract (2nd degree), making false representations for a government contract (2nd degree), theft by deception (2nd degree), tampering with public records or information (3rd degree), and falsifying or tampering with records (4th degree).

The indictment alleges that between Nov. 1, 2002 and Oct. 31, 2007, the defendants, in their roles as managers for Laidlaw Transit Services, knowingly or purposely submitted invoices and other documents to Burlington County that contained material misrepresentations and fraudulent information. The false information was submitted in connection with two contracts between Burlington County and Laidlaw Transit Services for bus services: (1) a contract to operate the Burlington County Transportation System (BCTS) for the Elderly and Adult Disabled, and (2) a contract to operate the BURLINK transit system, a fare-based public transit system on set routes throughout the county. It is alleged that as a result of the fraud and misrepresentations by the defendants, Burlington County was overbilled approximately $450,000.

“With this indictment, we send a strong message to corporate officials who do business with state, county and local agencies,” said Attorney General Dow. “If you cheat the taxpayers of New Jersey, we will catch you and we will prosecute you.”

“Government agencies pay millions of dollars each year under public contracts and must be able to count on the integrity of the vendors with whom they do business,” said Director Taylor. “We will thoroughly investigate any allegations of corporate corruption in government contracts.”

The case was referred to the Division of Criminal Justice by the Burlington County Prosecutor’s Office, after county officials alerted the prosecutor’s office about suspicious discrepancies in documentation submitted by Laidlaw Transit Services.

The investigation by the Division of Criminal Justice Corruption Bureau revealed that, with respect to the BCTS contract, the defendants allegedly conspired to submit false invoices and supporting documentation that reported higher numbers of trips made than can be accounted for by the numbers of actual riders who used the transportation system. The system includes routes to Buttonwood Hospital, the Veterans Administration Hospital in Philadelphia, the Tender Adult Day Care Center in Moorestown, and Burlington County Nutrition Program sites. The county paid Laidlaw a certain rate per trip, times the actual number of trips provided.

Under the BURLINK contract, Laidlaw was paid based on the monthly hours of operation multiplied by a contractual hourly rate. The investigation revealed that the defendants allegedly falsified documents submitted to the county to show reduced ridership. This fact is significant because all cash fares collected by Laidlaw were subtracted from the amount paid to Laidlaw under the terms of the contract. By fraudulently underreporting ridership and fares collected, the defendants increased the amounts paid to Laidlaw by the county.

Laidlaw was acquired by First Transit, Inc. in early 2008. Neither Laidlaw nor First Transit currently have contracts with the county.

This is the second indictment obtained as a result of the investigation. On Feb. 11, 2009, the Division of Criminal Justice obtained a state grand jury indictment charging Isaiah Davis, 63, of Clementon, a former project manager at Laidlaw’s Cinnaminson location, with overbilling the county under the BCTS contract between March 10, 2003 and Feb. 19, 2004. Davis allegedly overcharged the county by approximately $32,956 by billing for bus trips that were not provided on the routes to Buttonwood Hospital and the VA Hospital. That indictment is pending.

Deputy Attorney General Anthony A. Picione, deputy chief of the Division of Criminal Justice Corruption Bureau, and Deputy Attorney General Peter Lee presented the indictments to the state grand jury. The investigation was conducted and coordinated for the Division of Criminal Justice Corruption Bureau by Detective Stacy Scott, who is lead detective, Detective Sgt. David Patella, who is now retired, Detective Sgt. David Nolan, Civil Investigator Wayne Cummings, and Deputy Attorneys General Picione, Lee, Pearl Minato and Frank Muroski.

The indictment was handed up to Superior Court Judge Edward M. Neafsey in Mercer County, who assigned the case to Burlington County, where the defendants will be ordered to appear in court at a later date to answer the charges.

Second-degree crimes carry a maximum sentence of 10 years in state prison and a $150,000 fine, while third-degree crimes carry a maximum sentence of five years in prison and a $15,000 fine. Fourth-degree crimes carry a maximum sentence of 18 months in prison and a $10,000 fine.

The indictment is merely an accusation and the defendants are presumed innocent until proven guilty. A copy of the indictment is available with this press release at www.njpublicsafety.com.

The Division of Criminal Justice has established a toll-free Corruption Tipline 1-866-TIPS-4CJ for the public to report corruption, financial crime and other illegal activities. The public can also log on to the Division Web site at www.njdcj.org to confidentially report suspected wrongdoing.

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