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With Texas man, they alleged overbilled for bus services

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, state Criminal Justice Director Stephen J. Taylor announced Friday.

The state Division of Criminal Justice Corruption Bureau obtained a six-count state grand jury indictment against Paul O'Brien, 43, of Hillsborough, district manager for Laidlaw; Richard Miranda, 36, of Universal City, Tx., former project manager for Laidlaw, and Reinaldo Monzon, 55, of Hamilton (Mercer), N.J., former operations manager for Laidlaw.

The indictment was returned by the state grand jury on Dec. 13, but was sealed by court order until Friday. It charges each defendant with conspiracy, making false payment claims for a government contract, making false representations for a government contract, theft by deception, tampering with public records or information, and falsifying or tampering with records.

The indictment alleges that between Nov. 1, 2002 and Oct. 31, 2007, O'Brien, Miranda and Monzon, in their roles as managers for Laidlaw, knowingly 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 the county and Laidlaw for bus services. One contract was to operate the Burlington County Transportation System (BCTS) for the elderly and disabled. The other was 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," state Attorney General Paula T. Dow said. "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," Taylor said. "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 Prosecutor's Office, after county officials alerted the prosecutor about suspicious discrepancies in documentation submitted by Laidlaw. The investigation revealed that, with respect to the BCTS contract, the accused men 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 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, 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 Attorneys General Anthony A. Picione and Peter Lee presented the indictments to the grand jury. The investigation was conducted and coordinated by Det. Stacy Scott and Det. Sgt. David Patella, who is now retired, Det. Sgt. David Nolan, Civil Investigator Wayne Cummings, and Deputy Attorneys General Pearl Minato and Frank Muroski.

The indictment was handed up to Superior Court Judge Edward M. Neafsey in Trenton, who assigned the case to Mount Holly, 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.

— TOM HESTER SR., NEWJERSEYNEWSROOM.COM