White Collar Crime News

Family is indicted for official misconduct and other charges August 17, 2009

Its times like this that a family is going to quickly learn how tight they really are.  In just about any multi-defendant case, either someone flips or everyone pleas out at the same time.  In this case, it is unlikely that family members will flip on each other.  Thus, everyone will have to act as one.  This can really complicate things as it is tough to get everyone on the same page.  The lawyers need to  work together from the start to achieve the best results. 

TRENTON – A local administrator of the New Jersey Home Energy Assistance (HEA) Program was indicted today with her three sisters, her brother and her sister-in-law on charges they stole $24,086 from the state program.

In a related case, the owner of a Paulsboro-based heating oil company pleaded guilty last week to defrauding the HEA Program of $400,000 by offering low-income beneficiaries of the program cash for their state-issued assistance checks instead of fuel to heat their homes. The charges in both cases stem from investigations by the Division of Criminal Justice Corruption Bureau, conducted with assistance from the New Jersey Department of Community Affairs.

According to Criminal Justice Director Deborah L. Gramiccioni, Constance Campbell, 23, of Chester, Pa., was indicted today on charges she used her position as an HEA manager for Tri-County Community Action to process false HEA applications for herself and five family members. Tri-Community Action is a nonprofit contracted by the state to administer the HEA program in Cumberland, Gloucester and Salem counties.

Family members allegedly received a total of $24,086 in benefits for which they were not eligible, including $15,012 in HEA checks intended for heating oil purchases. They allegedly traded the checks for cash from the local fuel supplier who pleaded guilty last week.

That supplier, Thomas J. Harris, 66, of Woolwich, owner and sole proprietor of Harris Fuel Oil, purchased state assistance checks from numerous beneficiaries of the HEA Program. He pleaded guilty on Aug. 10 before Superior Court Judge M. Christine Allen-Jackson in Gloucester County to second-degree charges of financial facilitation of criminal activity (money laundering) and misapplication of entrusted property and property of government.

“This supplier’s conduct was outrageous,” said First Assistant Attorney General Ricardo Solano. “He tempted low-income residents with instant cash, exploiting their financial condition as well as the government program set up to help them heat their homes. When oil costs soared, so did his business, to the point where he misappropriated $400,000 in state funds in just 17 months.”

“Today’s indictment charges that a manager for the HEA Program in Salem and Gloucester counties abused her position of trust so she and her family could illegally profit,” Solano added. “We will not tolerate fraud against public assistance programs.”

The HEA Program is administered by the New Jersey Department of Community Affairs and local agencies contracted by DCA. The New Jersey HEA Program encompasses two separate programs, the Low-Income Home Energy Assistance Program (LIHEAP) and Universal Service Fund Program (USF). The LIHEAP program provides direct financial assistance to beneficiaries in the form of payments to utility companies and to fuel vendors to help low-income households meet the cost of home heating and medically necessary cooling. The USF program assists such households by providing credits against their natural gas and electric bills. The Harris plea involved the LIHEAP program. The Campbell indictment involves both programs.

“Those who think they can cheat government assistance programs will find themselves facing charges like these defendants.” said Director Gramiccioni. “We will work with the government agencies involved to uncover and aggressively prosecute anyone who defrauds these programs. Our investigation into misuse of HEA funding is continuing.”

Constance Campbell was indicted with her three sisters – Denise Campbell, 35, of Penns Grove, Patsy Campbell, 29, of Chester, Pa., and Priscilla Campbell, 21, of Paulsboro – her brother, Dennis Campbell, 37, and his wife, Hollyann Allen, also 37, both of Philadelphia, Pa.

Constance Campbell was an office manager/HEA manager for Tri-County’s Salem County and Gloucester County offices. Her duties included processing HEA benefit applications.

Between January 2007 and June 2009, Constance Campbell allegedly created fraudulent accounts for herself and each of the indicted family members, none of whom were eligible for benefits. Four, including Constance, didn’t even reside in New Jersey. Some used the family member’s name on the account, but others used the name of another person or a fictitious name to hide the beneficiary’s true identity. Certain applications also deliberately understated household income or included additional fictitious dependents in order to increase the amount of benefits paid out on the application.

Where a false name was used, the family member’s name would be listed on the account as the authorized representative of the household, so checks would be payable to the family member. The four defendants who did not reside in New Jersey allegedly used the address of a New Jersey resident family member or Post Office boxes in New Jersey to receive the benefit checks. The sisters who did live in New Jersey, Denise and Priscilla, allegedly received USF benefits in the form of credits to their utility accounts, in addition to LIHEAP checks.

All of the defendants were charged in the indictment with misapplication of entrusted property and property of government (3rd degree) and financial facilitation of criminal activity (money laundering) (3rd degree). In addition, Constance, Patsy and Dennis Campbell and Hollyann Allen were charged with official misconduct (2nd degree), theft by deception (3rd degree), tampering with public records or information (3rd degree), and falsifying records (4th degree).

All of the indicted defendants allegedly used Harris to obtain cash for HEA fuel oil checks issued during this past heating season.

Under Harris’ plea agreement, the state will recommend that he be sentenced to four years in state prison on each of the two charges, with the sentences to be served concurrently. He must also pay full restitution of approximately $152,000, and he is barred for life – along with any business in which he owns more than a 5 percent interest – from doing business with the state. Judge Allen-Jackson scheduled sentencing for Harris for Nov. 20.

In pleading guilty, Harris, admitted that he paid HEA beneficiaries for their program checks without delivering any fuel oil. Harris admitted that he would pay the HEA beneficiary a sum less than the amount of the state check, either by cash or company check, and keep the difference, depositing the HEA check into a company bank account.

Under the LIHEAP program, 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 would purchase benefit checks from beneficiaries who were not regular customers of his company.

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 by the Division of Criminal Justice Corruption Bureau revealed that Harris has been involved in this fraud for the past five or six heating seasons, the money involved grew substantially with the dramatic increase in the size of the HEA checks issued in the past season.

Investigators identified 259 specific transactions between January 2008 and May 2009 where Harris deposited an HEA benefit check and wrote out a contemporaneous check to the HEA beneficiary. From these 259 transactions, HEA funds totaling $399,812 were deposited into accounts maintained by Harris. Harris paid out $247,700.50 in checks to the HEA beneficiaries in exchange for these checks and, through these transactions, retained $152,111.50 of the HEA funds for himself.

Deputy Attorneys General David M. Fritch and Robert Czepiel took the guilty plea from Harris and presented today’s indictment to the state grand jury. The investigations in these cases 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 with assistance from the New Jersey Department of Community Affairs.