Owner of Paterson School Bus Company Charged with Fraud for Covering Up Drivers with Criminal Records

Attorney General Gurbir S. Grewal announced criminal charges against the owner of a Paterson-based school bus company, its manager, and the company itself for allegedly providing false information to school districts

The false information was given in connection with contracts in order to cover up the fact that the company hired unqualified drivers, failed to conduct mandatory drug testing and criminal background checks for drivers and aides and operated unsafe buses, all in violation of contract terms and state requirements.

The owner, Shelim Khalique, 51, of Wayne, the manager, Henry Rhodes, 56, of Paterson, and the company, A-1 Elegant Tours, Inc., d/b/a Eastern Star Transportation, LLC, (“A-1”), were each charged today by complaint-summons with the following offenses:

Conspiracy (2nd Degree) False Representations for a Government Contract (2nd Degree) Theft by Deception (2nd Degree) Tampering with Public Records or Information (3rd Degree)

Khalique and Rhodes were also charged with Misconduct by a Corporate Official (2nd Degree).

Personnel files seized last year during an execution of a search warrant revealed that A-1 employed numerous drivers who did not have valid commercial driver’s licenses or required endorsements, had suspended licenses, and/or had criminal records.

A-1 also employed bus aides with criminal records. A number of files were missing mandatory records of fingerprinting, background checks, and drug testing.

Two former A-1 bus drivers face pending criminal charges in Essex and Passaic Counties for allegedly driving buses with one or more children on board while under the influence of narcotics.

The driver in Essex County crashed the bus.

Another former driver is a registered sex offender under Megan’s Law.

“We have rightly focused considerable attention in recent years on improving safety and security within our schools, but we also must ensure that children are safe while being transported to and from school,” Attorney General Grewal said. “As a parent and public official, I have no higher priority than protecting our children. This bus company allegedly lied about its employees and equipment to secure contracts, and then had unqualified drivers, convicted felons, and those under the influence drive and supervise young children each day in what were frequently unsafe vehicles. This is an unconscionable case of contract fraud.”

“We are always determined to root out fraud in government contracts, because it represents a costly drain on public resources that can undermine important projects and services,” Director Thomas Eicher of the Office of Public Integrity and Accountability said.

“It is painfully apparent that the operators of this company lost their moral compass, putting profit above safety by placing innocent children on buses unfit for the road, which were operated by unqualified drivers, who in many instances had criminal records,” Colonel Patrick J. Callahan, Superintendent of the New Jersey State Police said.

The charges were filed in an investigation by the AG’s Office of Public Integrity and Accountability, New Jersey State Police, Essex County Prosecutor’s Office, and Passaic County Prosecutor’s Office.

From 2016 to 2020, A-1 had contracts with public school districts in Essex, Hudson, Passaic and Union counties.

Today’s charges relate exclusively to contracts in Essex County, but the investigation is ongoing. A-1 had contracts with a total value in excess of $1 million with various public school districts in Essex County during the time period in question.

New Jersey laws and regulations require that all school bus drivers possess a valid commercial driver’s license (CDL) with two additional endorsements to carry students as passengers.

School bus drivers and bus aides are required to undergo drug testing and criminal background checks, and drivers or aides with criminal records or known substance abuse issues are prohibited from driving or working on school buses.

On May 31, 2019, investigators conducted surprise motor vehicle inspections of A-1’s buses at various schools after they dropped off students in the morning.

Almost all of the buses failed inspection so badly that they were impounded and were not allowed to be driven off the school properties.

Throughout 2018, the Motor Vehicle Commission (MVC) cited A-1 and its drivers numerous times, including 22 citations for Allowing a Disqualified Driver to Operate a Commercial Motor Vehicle, nine citations for Failure to Possess a Valid CDL while Operating a Commercial Motor Vehicle, five citations for Failure to Possess Valid Endorsements, and one citation for Driving with a Suspended License.

The MVC issued additional citations for failing to present appropriate documentation. These citations all arose from on-site vehicle inspections performed by MVC at A-1’s Paterson yard.

A-1 allegedly used various methods in an effort to evade MVC inspections and citations, including diverting unlicensed drivers away from inspection sites and having drivers keep buses at their homes overnight.

Second-degree crimes carry a sentence of five to 10 years in state prison and a fine of up to $150,000, while third-degree crimes carry a sentence of three to five years in prison and fine of up to $15,000.

The charges are merely accusations and the defendants are presumed innocent until proven guilty.