New Jersey Division of Consumer Affairs Obtains $160,000 in Restitution from Contractor that Allegedly Over-Billed Public Entities
NEWARK – Attorney General Jeffrey S. Chiesa announced that the State Division of Consumer Affairs has distributed nearly $160,000 in restitution checks to more than 100 municipalities, utilities authorities, public works departments, and other public entities that allegedly were over-billed by a government contractor.
The money was obtained through a settlement between the Division of Consumer Affairs and Jet Vac, a Wharton-based company that sells and services various types of equipment including sewer cleaning, street sweeping, and vacuum truck equipment. Also under the settlement, Jet Vac’s former Vice President and General Manager, Michael Rattay, has relinquished his role as an employee and officer of the company. Rattay is permanently barred from soliciting, negotiating, obtaining, or administering any State contract.
“This company and its former general manager allegedly charged municipalities and other non-state entities for hourly labor and shop charges that were not permitted under their State contract,” Attorney General Chiesa said. “This settlement removes Michael Rattay from the leadership he had when this alleged misconduct occurred, penalizes the company, provides restitution to the affected public entities, and ensures that Jet Vac will comply with our laws in the future.”
As part of the settlement, Jet Vac paid $158,226.32 to the Division of Consumer Affairs as restitution for the affected public entities. The Division has sent individual restitution checks to all individual affected agencies. The average owed to each public entity is approximately $1,400. The full list of affected entities, and the amount each will receive, is attached.
In addition to and separate from the restitution payment, Jet Vac also paid the Division another $129,000 that was assessed in the settlement against Rattay. The amount assessed against Rattay includes $115,000 in civil penalties and $14,000 to reimburse the State’s attorneys’ fees and investigative costs.
“The type of unlawful conduct alleged here, victimizes every New Jersey resident by potentially affecting our tax rates and undermining consumers’ trust in state contractors,” Eric T. Kanefsky, Acting Director of the New Jersey Division of Consumer Affairs, said. “The settlement is a win for our residents as well as the municipalities and other public entities who were entitled to the benefits of the State contract.”
Jet Vac contracts with the State for the sale and servicing of various types of equipment. Under Jet Vac’s contract with the State, the company agreed to offer goods and services to municipalities or certain other public entities at the same prices that it offered those goods and services to State agencies.
A State investigation revealed that, from at least February 2003 until the middle of 2007, Jet Vac allegedly sent invoices to municipalities and other public entities, with hourly rates and other charges that were higher than those permitted under Jet Vac’s state contract, or not permitted under the contract.
The State asserted that this conduct, performed under Rattay’s leadership, violated New Jersey’s Consumer Fraud Act, which applies to goods and services that are offered to the public, regardless of whether the purchaser is an individual, a company, or a government entity. The conduct allegedly resulted in the over-billing of the more than 100 municipalities and other public entities between 2003 and 2012.
In addition to the restitution payment and as a requirement of the settlement, Jet Vac will provide the State every six months with a current list of all government contracts, as well as a certification that Rattay was not involved in any way with the contracts. A violation can result in the immediate cancellation of any State contracts with Jet Vac, and Jet Vac being barred from future contracts.
Investigator Cullen Church, of the New Jersey Division of Consumer Affairs’ Office of Consumer Protection, and former Sgt. Dino Dettorre of the Division of Criminal Justice, participated in this investigation. Deputy Attorneys General Stephen Zweig and Joshua Rabinowitz represented the State in this matter.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the New Jersey Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.
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