Trenton, NJ – Attorney General Christopher S. Porrino and the Office of the Insurance Fraud Prosecutor (OIFP) recently announced that an Ocean County electronic recycling company and its owner admitted they bilked nearly $600,000 from an insurance carrier by providing false and misleading information to obtain lower premiums on workers compensation coverage.
Supreme Asset Management Recovery (SAMR), in Lakewood, and its owner Albert Boufarah, 49, of Toms River, pleaded guilty to second-degree conspiracy and insurance fraud in a hearing before Superior Court Judge Wendel E. Daniels in Ocean County.
As part of the plea agreements, the state will recommend a three-year sentence for Boufarah, and a fine not to exceed $200,000 for SAMR. Both defendants will be jointly and severally liable for $598,282 in restitution to New Jersey Manufacturer’s Insurance Company (NJM). Sentencing for both defendants is scheduled for March 3, 2017.
“Instead of accurately representing the risks associated with the jobs performed by SAMR employees, these defendants conspired to lie and cheat to avoid paying their fair share in premiums,” said Attorney General Porrino. “By holding both Boufarah and SAMR responsible for this criminal manipulation of the system, we are sending a message that this kind of corporate fraud will not be tolerated.”
“Workers compensation fraud undermines a system designed to financially assist employees who suffer on-the-job accidents,” said Acting Insurance Fraud Prosecutor Christopher Iu. “We will aggressively investigate and punish those exploit the system for their personal enrichment.”
According to a state grand jury indictment handed up in February, SAMR and Boufarah, along with five other defendants, misclassified SAMR employees to obtain lower workers compensation coverage from New Jersey Casualty, a subsidiary of NJM.
The 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.
Also charged in the February indictment were:
Donna DeMartino, 39, of Brick, an official at SAMR
The Amato Agency, LLC, an insurance agency in Neptune
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 seven of the defendants were charged with conspiracy, insurance fraud, and theft by deception in the second degree.
Boufarah, DeMartino, Joseph Amato II, Joseph Amato III, and Philips 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.
DeMartino previously pleaded guilty to third-degree insurance fraud and agreed to testify truthfully for the State. As part of the plea agreement, prosecutors will recommend probation when DeMartino is sentenced on November 10.
Charges are pending against the remaining defendants.
Deputy Attorney General Colin J. Keiffer represented the State in the plea hearing. Detective Megan Flanagan and Det. Kristi Procaccino coordinated the investigation, with assistance from Det. Sgt. Jarek Pyrzanowski, Det. Kahlil McGrady, Assistant Section Chief Chris Runkle and Analysts Theresa Worthington and Terri Drumm.
Louis Barbone, Esq., of Jacobs & Barbone, represented Boufarah and SAMR in the plea hearing.
Steven E. Yost. Esq., of Haines & Yost, represented DeMartino in the plea hearing.
Source: NJ AG’s Office