NJ Bus Company To Pay $20.5M In Fraud Lawsuit Settlement

TRENTON, NJ — Hoboken-based Academy Bus will pay more than $20 million to settle a lawsuit accusing the company of overcharging New Jersey Transit by underreporting missed bus trips and overbilling for hours and miles driven, New Jersey Acting Attorney General Andrew Bruck announced Friday.

The $20.5 million settlement represents the largest fraud settlement in state history outside the healthcare industry, according to a release from the attorney general's office.

In November 2020, the state of New Jersey joined an employee's whistleblower lawsuit against Academy Bus, which advertises itself as the nation’s "largest private transportation company."

The suit accused the company of "extensive multi-year, multi-million-dollar fraud," claiming it failed to report tens of thousands of missed bus trips between April 2012 and December 2018, according to the attorney general's release.

During that time period, Academy operated seven bus routes in the Hudson and South Hudson service areas, which saw approximately 175,000 bus trips each year.

Academy overcharged the state in two ways, according to the lawsuit. First, Academy underreported to New Jersey Transit the number of bus trips it missed each month, helping the company avoid millions of dollars of missed trip deductions.

According to the allegations in the complaint, the gap between the "real number" of missed trips and the number actually submitted to the state decreased during periods when Academy knew New Jersey Transit was actively monitoring the company's performance.

Second, Academy allegedly billed New Jersey Transit for miles and hours driven for buses that never actually ran.

"This settlement sends a clear message: defrauding the state doesn’t pay," Bruck said in a release. "We are not only requiring the corporate defendants to pay more than the amount of their alleged fraud. We also are holding individual defendants financially responsible and requiring Academy Bus to adopt corrective measures designed to prevent similar misconduct in the future."

In addition to Academy Bus, the settlement also names multiple Academy employees.