Workers' Comp Insurance Fraud Scheme Nets 3-Year Sentence For Toms River Man: AG

TOMS RIVER, NJ — The owner of an electronics recycling company has been sentenced to three years in prison for lying about the work his company did and defrauding an insurance carrier out of nearly $600,000 in workers' compensation coverage, the state attorney general's office announced Monday.

Albert Boufarah, 50, of Toms River, owner of Supreme Asset Management Recovery of Lakewood, was sentenced by Superior Court Judge Wendel E. Daniels, Attorney General Christopher S. Porrino announced.

In addition to his jail sentence, Boufarah's company was fined $100,000 and he and his company also were ordered to pay restitution, Porrino's office said.

Boufarah and SAMR pleaded guilty last fall to second-degree conspiracy and insurance fraud. The defendants admitted conspiring with officials at SAMR and a Neptune insurance agency, The Amato Agency, LLC, to misclassify SAMR’s warehouse workers as office staff on insurance applications in order to obtain much lower premiums for workers’ compensation coverage.

According to court documents, SAMR officials falsely asserted that all but a handful of the company's 50-72 employees were office workers performing clerical tasks. In reality most of them were warehouse workers performing higher-risk jobs like disassembling and refurbishing televisions, computers, and other electronic devices. Coverage premiums are higher for employees performing higher risk jobs.

The scheme bilked New Jersey Casualty (NJC), a subsidiary of New Jersey Manufacturer’s Insurance Company (NJM), out of $598,282 from January 2011 through June 2014.

Also charged in the scheme:

• Donna DeMartino, 41, of Brick, an official at SAMR. She pleaded guilty to third-degree insurance fraud and was sentenced to two years of probation.
• Joseph Amato II, 74, of Waretown, owner and agent at The Amato Agency, LLC. He is charged with conspiracy, insurance fraud, theft by deception, and misconduct by a corporate official, all in the second degree; as well as fourth-degree false swearing.
• Joseph Amato III, 50, of Howell, an agent at The Amato Agency LLC. He is charged with conspiracy, insurance fraud, theft by deception, and misconduct by a corporate official, all in the second degree; as well as fourth-degree false swearing.
• Jennifer Phillips, 44, of Old Bridge, an agent at The Amato Agency, LLC. She is charged conspiracy, insurance fraud, theft by deception, and misconduct by a corporate official, all in the second degree.

“Employers who manipulate the insurance system to avoid paying their fair share drive up insurance costs for everyone and put honest businesses at a competitive disadvantage,” said Acting Insurance Fraud Prosecutor Christopher Iu. “By holding both Boufarah and SAMR responsible, we are sending a message that workers’ compensation fraud is serious crime and all involved will be held accountable.”

People who are concerned about insurance cheating and have information about a fraud can report it anonymously by calling the toll-free hotline at 1-877-55-FRAUD, or visiting the Web site at www.NJInsurancefraud.org. State regulations permit a reward to be paid to an eligible person who provides information that leads to an arrest, prosecution and conviction for insurance fraud.

Albert Boufarah photo provided by the New Jersey Attorney General's Office