Acting Attorney General John J. Hoffman and the Office of the Insurance Fraud Prosecutor (OIFP) announced today that two South Jersey corporations and five of their officials have been indicted in an alleged workers compensation fraud scheme that bilked nearly $600,000 from an insurance carrier.
Supreme Asset Management Recovery (SAMR), an electronic recycling company in Lakewood, and The Amato Agency, LLC, an insurance agency in Neptune, along with the five officials, were indicted on second-degree charges of conspiracy, fraud and theft by deception for allegedly providing false and misleading information to obtain lower premiums on workers’ compensation insurance.
According to the state grand jury indictment, the two companies and the five officials - including SAMR owner Albert Boufarah and Amato Agency owner Joseph Amato II - misclassified SAMR’s warehouse workers as office staff on insurance applications to obtain much lower workers compensation premiums.
The scheme bilked New Jersey Casualty (NJC), a subsidiary of New Jersey Manufacturer’s Insurance Company (NJM), out of $598,282 from January 2011 through June 2014, the indictment alleges.
Charged in the indictment were:
· Albert Boufarah, 49, of Toms River, owner of SAMR
· Donna DeMartino, 39, of Brick, an official at SAMR
· Joseph Amato II, 72, of Waretown, owner and agent at The Amato Agency, LLC
· Joseph Amato III, 49, of Howell, agent at The Amato Agency, LLC
· Jennifer Phillips, 42, of Old Bridge, agent at The Amato Agency, LLC
All five co-defendants were also charged with second-degree misconduct by a corporate official. Boufarah and DeMartino were additionally charged with fourth-degree falsifying records. Joseph Amato II and Joseph Amato III, were additionally charged with fourth-degree false swearing.
In obtaining workers compensation coverage, the five co-defendants falsely asserted that all but a handful of SAMR’s 50-72 employees were office workers performing clerical tasks, according to prosecutors.
An investigation revealed that in reality most of them were warehouse workers performing higher-risk jobs like disassembling and refurbishing televisions, computers, and other electronic devices, prosecutors allege.
Second-degree crimes carry a sentence of five to 10 years in state prison and a criminal fine of up to $150,000; third-degree crimes carry a sentence of three to five years in state prison and a criminal fine of up to $15,000, while fourth-degree crimes carry a maximum sentence of 18 months in prison and a $10,000 fine. If the corporations are found guilty, they each face a criminal fine of up to $1.35 million.
Acting Insurance Fraud Prosecutor Iu noted that some important cases have started with anonymous tips. People who are concerned about insurance cheating and have information about a fraud can report it anonymously by calling the toll‑free hotline at 1‑877‑55‑FRAUD, or visiting the Web site at www.NJInsurancefraud.org. State regulations permit a reward to be paid to an eligible person who provides information that leads to an arrest, prosecution and conviction for insurance fraud.