5 Locals Charged With Defrauding Workers’ Comp $600K

Albert Boufarah, 50, of Toms River, was sentenced to three years in prison and fined $100,000 for his role in defrauding New Jersey Casualty out of nearly $600,000 in workers’ compensation benefits. (Photo courtesy Office of the Attorney General)

TOMS RIVER – Have you recycled any old computers or electronics lately? Did you use Supreme Asset Management Recovery (SAMR) in Lakewood to do the job?

Its owner, 50-year-old Albert Boufarah of Toms River, was just sentenced to three years in prison and fined $100,000 for defrauding an insurance carrier roughly $600,000 in workers’ compensation benefits.

According to Attorney General Christopher S. Porrino, Boufarah lied about the type of work his employees did in order to receive the benefits. A conspiracy developed between Boufarah, other SAMR officials and The Amato Agency, LLC, the company’s insurance agent. The group allegedly misclassified warehouse workers as office staff on insurance applications in order to get lower insurance premiums for workers’ compensation benefits.

“For these defendants, lying to their insurance carrier to save money on premiums turned out to be very costly,” said Attorney General Porrino. “The sentence imposed on them should act as a deterrent to others tempted to cut business costs by breaking the law.”

Based on the charges filed against the defendants, the fraudulent insurance applications they filed showed that nearly all of the company’s 50-72 employees were office workers performing clerical duties. But based on SAMR’s website, the company specializes in recycling outdated electronic equipment, such as old computers, so it would make sense that the majority of its workers are warehouse staff performing high-risk jobs like disassembling and refurbishing televisions, computers and electronic devices.

Coverage premiums are typically higher for these types of jobs, as they incur more risk.

“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.”

The orchestrated scheme stole $598,282 from New Jersey Casualty, a subsidiary of New Jersey Manufacturer’s Insurance Company (NJM) from January 2011 to June 2014.

Also charged in the scheme were:

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

Acting Insurance Fraud Prosecutor Iu pointed out that many important cases start out with anonymous tips from the community. To report concerns about insurance cheating or information about a fraud, call the toll-free hotline at 1-877-55-FRAUD or visit NJInsurancefraud.org.