HOBOKEN, NJ - Academy Bus has been named in as a defendant in a $15M lawsuit by the State of New Jersey. The Hoboken-based bus company allegedly defrauded New Jersey Transit (NJT) by underreporting the number of scheduled bus trips the company missed, while also charging fees for hours and miles driven for bus trips that never happened.
Academy has an operational agreement with NJT—handling roughly 175,000 bus trips each year on seven different routes in Hudson County—receiving $12 million annually for its services. Among the more widely used routes is the 119, which runs from Bayonne through Jersey City, Hoboken, Weehawken and on to Port Authority in Manhattan.
The lawsuit alleges that Academy engaged in an “extensive multi-year, multi-million-dollar fraud” after failing to report tens of thousands of missed bus trips between April 2012 and December 2018. According to the NJ Attorney General's Office, this case is the highest dollar-value whistleblower lawsuit in which the State has 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 Attorney General Grewal. “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. With this lawsuit, we are seeking justice for the riding public as well as New Jersey taxpayers.”
The lawsuit came about when someone close to the organization came forward to make the allegations. Text messages quoted in the complaint cite an employee proposing to reduce the real number of missed trips for September 2018 from over 1800 to just 700. Another responded: “Bro bro. It’s 1800 missed, really—we are gambling with this huh?” According to Grewal's statement, Academy eventually reported 804.5 missed trips to NJT for that month, allegedly defrauding NJT by failing to report over 1000 missed trips.
Part of the reason Academy left so many riders stranded, according to the complaint, is that the company was shifting drivers from the NJT routes to cover more profitable charter bus routes.
A witness who worked as a dispatcher for Academy reported telling Academy’s President and CEO Francis Tedesco directly that diverting drivers would cause missed trips on NJT routes. Tedesco allegedly responded, “I don’t care about NJ Transit.”
Tedesco and Academy are also currently embroiled in an eminent domain battle with the City of Hoboken over use of land in the southwest corner of town.
Academy refers to itself as, "the largest privately owned and operated transportation company in the US," and has been serving the East Coast for over 40 years.
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