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Wednesday, February 3, 2016

Fraud: Two South Jersey Corporations and Five of Their Officials Charged With Stealing Nearly $600,000

Acting NJ 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.
“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,” said Acting Attorney General John J. Hoffman. “By criminally charging the corporations along with the individuals, the Office of Insurance Fraud Prosecutor is sending a message to would-be offenders that this deliberate, illegal manipulation of 
the system will not be tolerated in New Jersey and all involved will be held accountable.”

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.

“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,” said Acting Insurance Fraud Prosecutor Christopher Iu. “When individuals cheat the system to avoid paying their fair share, honest policy holders are forced to make up the carriers’ losses in the form of higher premiums.”
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.

Deputy Attorney General Colin J. Keiffer presented the case to the grand jury. Detective Megan Flanagan and Det. Kristi Procaccino coordinated the investigation, with assistance from Det. Sgt. Jarek Pyrzanowski, Det. Kahlil McGrady, and Analysts Chris Runkle, Theresa Worthington and Terri Drumm