2 South Jersey Businesses Accused of Workers’ Comp Fraud Scheme

February 3, 2016

Authorities alleged that a recycling company in South Jersey conspired with an insurance agency to provide misleading information to a workers’ compensation carrier to obtain lower premiums on workers’ compensation insurance.

New Jersey Acting Attorney General John J. Hoffman announced Tuesday that Supreme Asset Management Recovery (SAMR), an electronic recycling company in Lakewood, New Jersey, and The Amato Agency, an insurance agency in Neptune, New Jersey, along with five officials, were indicted on second-degree charges of conspiracy, fraud and theft by deception.

In obtaining workers’ comp coverage, the five co-defendants allegedly asserted on insurance applications that all but a handful of SAMR’s 50 to 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.

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, owner of SAMR; Donna DeMartino, an official at SAMR; Joseph Amato II, owner and agent at The Amato Agency; Joseph Amato III, agent at The Amato Agency; and Jennifer Phillips, agent at The Amato Agency.

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.

The indictment is merely an accusation and the defendants are presumed innocent until proven guilty.

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.

“These charges, if proven, represent a case of outrageous corporate greed in which Supreme Asset Management Recovery, The Amato Agency, and their high ranking officials, conspired to cheat hundreds of thousands of dollars from the insurance carrier,” New Jersey Acting Attorney General Hoffman said.

“By allegedly claiming these workers were performing low-risk duties, these co-defendants duped the insurance company into providing coverage at a fraction of the true cost,” New Jersey Acting Insurance Fraud Prosecutor Christopher Iu said.

Source: New Jersey Office of the Attorney General


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