June 17, 2010
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
Owner of Paulsboro Heating Oil Company Sentenced to Prison for Defrauding NJ Home Energy Assistance Program of Nearly $400,000
TRENTON – Attorney General Paula T. Dow and Criminal Justice Director Stephen J. Taylor announced that the owner of a Paulsboro-based heating oil company was sentenced to prison today for defrauding the New Jersey Home Energy Assistance Program of nearly $400,000.
According to Director Taylor, Thomas J. Harris, 66, of Woolwich, the owner and sole proprietor of Harris Fuel Oil, was sentenced to four years in state prison by Superior Court Judge M. Christine Allen-Jackson in Gloucester County. He pleaded guilty on Aug. 10, 2009 to second-degree charges of financial facilitation of criminal activity (money laundering) and misapplication of entrusted property and property of government. He was sentenced to four years on each charge, with the sentences to run concurrently.
Harris admitted that he defrauded the HEA Program of $399,812 by offering low-income beneficiaries cash for their state-issued assistance checks instead of fuel to heat their homes. Harris paid $247,700.50 to the beneficiaries in exchange for assistance checks in amounts totaling $399,812, which he deposited into Harris Fuel Oil accounts. As a result, Harris retained over $152,000 in HEA funds for himself. He must pay $152,100 in restitution to the New Jersey Department of Community Affairs, which administers the program with the assistance of local agencies that it contracts. As part of his plea, Mr. Harris is also subject to a lifetime ban on doing business with the State of New Jersey pursuant to a consent order executed by the court on August 10, 2009.
“This heating oil supplier shamelessly exploited the low-income beneficiaries of the New Jersey Home Energy Assistance Program, enticing them to trade the assistance checks that were supposed to heat their homes for a reduced amount of cash, while he pocketed the difference,” said Attorney General Dow. “In doing so, he stole from the state and its taxpayers.”
“We will continue to aggressively investigate and prosecute those who engage in this type of fraud, which drives up the cost of public assistance programs,” said Director Taylor.
The charges resulted from investigations by the Division of Criminal Justice Corruption Bureau, conducted with assistance from the Department of Community Affairs. Deputy Attorneys General David M. Fritch and Robert Czepiel prosecuted the case and represented the state at the sentencing hearing. The investigations have also resulted in charges against seven other defendants, including two local administrators of the HEA program.
Under the the Low-Income Home Energy Assistance Program (LIHEAP), one of two programs under the HEA Program, low-income beneficiaries who pay heating costs to a fuel oil supplier receive energy assistance in the form of two-party checks payable to the head of the household and their fuel oil supplier, identified only as “Your Heating Supplier.” These checks are marked with specific instructions to the bank that they are only for deposit by the heating oil supplier.
Harris Oil was a participating energy supplier in the LIHEAP program, providing fuel oil in Gloucester County, but Harris also purchased benefit checks from beneficiaries, even those who were not regular customers of his company. Harris would deposit the HEA check into his company bank account and pay the beneficiary a sum less than the amount of the state check – either by cash or company check – with Harris keeping the difference. Investigators learned that word had spread among HEA beneficiaries that Harris was engaging in the business of paying for HEA benefit checks. These transactions were generally conducted by Harris while parked in one of his business vehicles outside his office on West Broad Street in Paulsboro.
Although the investigation revealed that Harris was involved in the fraudulent scheme for five or six heating seasons, the money involved grew substantially with the dramatic increase in the size of HEA checks after fuel oil costs soared in 2008 and 2009. Investigators identified 259 specific transactions between January 2008 and May 2009, representing $399,812 in HEA funds, where Harris deposited an HEA benefit check in exchange for a contemporaneous check written to the HEA beneficiary.
In related cases, , a local administrator for the HEA Program, pleaded guilty on Feb. 24 to official misconduct for stealing $24,010 from the program. She must pay full restitution, and the state will recommend that she be sentenced to five years in prison. She admitted that she used her position as an HEA manager for Tri-County Community Action Partnership to process false HEA applications for herself and five family members. Tri-County Community Action is a nonprofit contracted by the state to administer the HEA program in Cumberland, Gloucester and Salem counties.
and her family members received a total of $24,010 in benefits for which they were not eligible, including approximately $15,000 in HEA checks intended for heating oil purchases that they traded for cash from Harris. The five family members were indicted with on Aug. 17, 2009 and all have since pleaded guilty. They are responsible with her for paying back the funds they received.
Another former local administrator for the HEA program employed by Tri-County was indicted on May 12, 2010. Nicole Victor, 37, of Paulsboro, allegedly stole $11,705 in home energy assistance funds by filing three false HEA applications and taking the assistance funds issued on the applications for her own benefit. The charges in that indictment are pending. They are merely accusations and the defendant is presumed innocent until proven guilty.
The charges in these cases stem from investigations by the Division of Criminal Justice Corruption Bureau, conducted with assistance from the New Jersey Department of Community Affairs. The investigations were conducted and coordinated for the Division of Criminal Justice Corruption Bureau by Lt. Keith Lerner, Sgt. Robert Ferriozzi, Detective Andrea Salvatini, Detective Anthony Luyber, Deputy Chief of Detectives Neal Cohen, Analyst Alison Callery and Deputy Attorneys General Fritch and Czepiel.
The New Jersey HEA Program encompasses two separate programs, LIHEAP and the Universal Service Fund Program (USF). The USF program assists low-income households by providing credits against their natural gas and electric bills. The Harris case involves the LIHEAP program, while the and Victor cases involve both programs.
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