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Lynette Bagby of Paulsboro pleads guilty to stealing $45,946

Denise Nicole Johnson of Paulsboro, who formerly worked as a local administrator of the state Home Energy Assistance (HEA) Program, has been sentenced to four years in state prison for defrauding the program of more than $20,000 by filing false applications to obtain benefits.

In addition, Lynette Bagby, also of Paulsboro, another program administrator, has pleaded guilty to stealing over $40,000 in program benefits through the submission of fraudulent benefit applications.

Johnson, 37, was sentenced by state Superior Court Judge M. Christine Allen-Jackson in Woodbury. Johnson pleaded guilty on Jan. 18 to second-degree official misconduct, admitting that she defrauded the HEA program of $22,980 by filing nine false applications to obtain benefits. She filed two of the applications by entering false information into the program’s computer system while employed as an HEA aide in the Paulsboro Office of Tri-County Community Action, a nonprofit contracted by the state Department of Community Affairs (DCA) to administer the program in Cumberland, Gloucester and Salem counties.

Johnson was ordered to pay full restitution of the $22,980 to the DCA and is permanently barred from public employment in New Jersey. She was indicted last year as a result of ongoing investigations by the Division of Criminal Justice Corruption Bureau, conducted with assistance from the DCA.

Bagby, 40, pleaded guilty to a pre-indictment accusation charging her with third-degree theft by deception before Allen-Jackson. Bagby admitted that, while working as an HEA aide and later an HEA supervisor for Tri-County from 2001 to 2008, she processed fraudulent applications in the names of relatives, acquaintances and others, which generated $45,946 in fraudulent benefits for herself and others. The state will recommend that she be sentenced to a year in county jail and a term of probation. She also must pay full restitution and will be permanently barred from public employment in the state. She is scheduled to be sentenced on Sept 23.

“Four defendants have now been sentenced to prison as a result of our investigations into fraud in this assistance program,” state Attorney General Paula T. Dow said. “We are determined to root out this type of corruption, which drains public funding that is intended to provide vital services to those in need.”

“By resolutely pursuing every lead in these investigations, we are continuing to prosecute, convict and incarcerate defendants for stealing from this public assistance program,” state Criminal Justice Director Stephen J. Taylor added.

As a result of the investigations by the Division of Criminal Justice Corruption Bureau, two other women who were HEA program local administrators and a Paulsboro-based heating oil supplier were previously sentenced to prison. In addition, charges are pending against a man who served as a local HEA administrator in Atlantic County.

Johnson was indicted along with a boyfriend, Anthony Lamont Taylor, 35, of Paulsboro, who received $2,648 on one application for which he submitted false information. He pleaded guilty on June 30 to third-degree misapplication of entrusted property and was sentenced on July 8 to three years of probation, which may be followed, at the judge’s discretion, by six months in a county jail.

The investigation revealed that, in addition to benefits in the form of credits applied to utility bills, these false applications generated two-party HEA benefit checks that were payable only to individuals and their home heating suppliers. The checks were to be used for the sole purpose of procuring home heating fuel and could be deposited only into the account of a home heating supplier. However, Johnson and Bagby exchanged and cashed these benefit checks through third parties for cash or checks payable solely to them.

Some of the HEA checks were exchanged for cash or company checks from Harris Fuel Oil of Paulsboro. Thomas J. Harris, 68, of Woolwich, the owner Harris Fuel Oil, pleaded guilty to money laundering and misapplication of entrusted property and property of government as a result of the state investigations. He was sentenced last year to four years in prison. He admitted he defrauded the HEA Program of $400,000 by offering low-income beneficiaries cash for their state-issued assistance checks instead of fuel oil. He was ordered to pay full restitution.