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Attorney General Gurbir Grewal Files Fraud Case Against Academy Bus

Academy Bus LLC allegedly defrauded NJ Transit (NJT) by not reporting missed bus trips, according to a lawsuit filed by Attorney General Gurbir S. Grewal. The state is intervening in a whistleblower lawsuit against the company.

The suit alleges Academy defrauded NJT by more than $15 million by vastly underreporting the number of scheduled trips the company missed. Additionally, the company charged fees for hours and miles driven, even though those trips never happened.

“With this lawsuit, we are seeking justice for the riding public as well as New Jersey taxpayers,” said Grewal. The complaint alleges that Academy may have missed so many trips because it was shifting drivers from the NJT routes it covered to its more profitable charter bus routes.

‘Pervasive’ Fraud

Filed in state Superior Court in Essex County, the lawsuit alleges Academy engaged in an “extensive multi-year, multi-million-dollar fraud” by failing to report tens of thousands of missed bus trips between April 2012 and December 2018.

The suit represented the highest dollar-value whistleblower lawsuit in which the state had ever intervened.

“Most of us know how frustrating it can be to wait for a bus that doesn’t show up on time or never appears at all,” said Grewal in a press statement. “Our complaint against Academy Bus alleges that one reason for those late and missing buses has been a pervasive, multi-year fraud by Academy that not only cost riders their time but also cost NJ Transit many millions of dollars.” 

Academy Examples

Included in the complaint are eyewitness accounts of misdeeds by the company. In one instant, the lawsuit describes how Academy’s internal records tracked two sets of numbers—the real number of missed bus trips (which officials labeled “RN”) and an adjusted set of false numbers, which was always significantly lower and which Academy eventually reported to NJT.

According to text messages quoted in the complaint, one employee proposed reducing the real number of missed trips for September 2018 from over 1,800 to just 700. Another responded: “Bro bro. It’s 1,800 missed, really—we are gambling with this huh?” Academy eventually reported 804.5 missed trips to NJT for that month, allegedly defrauding NJT by failing to report over 1,000 missed trips.

Another story relayed in the lawsuit was an eyewitness who worked as a dispatcher for Academy reported telling Academy’s President and CEO Francis Tedesco that diverting drivers would cause missed trips on NJT routes. Tedesco allegedly responded: “I don’t care about NJ Transit.”

Hudson County Focus

The lawsuit, which argues Academy left tens of thousands of bus trips and delayed riders all the while, focused mostly on the two service areas assigned to Academy. Those areas primarily cover the Hudson County waterfront, serving riders in Bayonne and Jersey City, and include the heavily used Route 119 line for commuters traveling to and from New York City.

The company operates seven NJT bus routes in the Hudson and South Hudson service areas, totaling about 175,000 bus trips per year.

Academy bills approximately $12 million for its services, while NJT retains bus fares. Customers in the region heavily used the buses to get from towns like Bayonne and Jersey City to commute into New York City

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