New court documents including an amended whistleblower’s lawsuit alleged that Academy Bus defrauded NJ Transit starting in 2003, years earlier than the state’s original $15 million suit filed last November contended.
The allegations were in an unsealed 2017 whistleblower lawsuit and a version amended earlier this month that was filed by Hector Peralta, a former Academy employee, who claims he was asked to doctor missed trip reports the private carrier filed with NJ Transit for bus service it was hired to run under contract. North Jersey.com first reported the new allegations Friday.
An amended lawsuit was filed by attorneys for Peralta on Jan. 7 and detailed how the alleged doctoring of missed bus trips started as early as 2003.
The 2017 whistleblower suit had been sealed by Judge Lisa M. Adubato and only parts of it were unsealed when with state Attorney General Gurbir S. Grewal’s office announced its suit against Academy last year. A Nov. 12, 2020 order allowed other documents to remain sealed until this month.
In November, the state Attorney General filed a suit against the Hoboken-based company, charging it with defrauding NJ Transit out of $15 million between April 2012 and December 2018, by underreporting the number of trips it missed and charging for others it never ran.
Attorneys for Academy said they plan to file a motion to dismiss Perelta’s latest suit. Additional motions to dismiss the Attorney General’s complaint with prejudice were filed on Jan. 20 by Academy’s attorneys.
Peralta detailed how it allegedly began when management told him in January 2003 not to submit a report to NJ Transit that detailed 10 missed trips, and was informed it was a new policy not to report them. The suit details allegations across more than a decade, including claims that management told Perlta to withhold information about trips from auditors.
In the amended suit, Peralta contends he was fired in 2016 for not following management orders to stop filing accurate missed trip reports.
Attorneys for the three Academy bus companies named in the suit said they’ll continue to fight the allegations.
“We intend to vigorously defend these allegations. As counsel for the Academy Bus Companies we have already moved to dismiss the Attorney General’s complaint for money damages and will seek dismissal of Mr. Peralta’s newest complaint at the appropriate time,” said Christopher S. Porrino, attorney for the bus companies in a statement. “We are looking forward to our day in court.”
The Attorney General’s allegations also raised questions by NJ Transit board members about how the alleged problem could have gone on so long without being detected. They demanded more oversight on information and reports filed by all private carriers.
Both the lawsuit and press reports about warnings, say audits as early as 2006 and as late as last February, raised questions about management control systems and the agency’s ability to monitor missed trips by contract carriers.
Academy was previously fined $5.9 million by NJ Transit, said Kevin Corbett, agency CEO, in an earlier interview. The fines were assessed for missed trips from fiscal year 2013 to fiscal year 2020, which ended on June 30, said Nancy Snyder, an agency spokeswoman.
NJ Transit was strapped for people in information technology and in other functions, he said.
“The tracking wasn’t adequate to catch it. We fined Academy $5.9 million and those are the ones we caught,” Corbett said. “It was like whack-a-mole.”
NJ Transit is working on a technological solution “to move away from private carrier self-reporting of trips,” officials said.
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Larry Higgs may be reached at lhiggs@njadvancemedia.com.
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Amended whistleblower suit accuses private bus company of defrauding NJ Transit since 2003 - NJ.com
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