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Lawsuits & Litigation

Bus Company Accused of Defrauding NJ Transit

— November 20, 2020

Attorney General Gurbir Grewal recently filed a civil suit against Academy Bus LLC, accusing it of defrauding New Jersey’s public transit corporation.

A civil complaint announced earlier this week claims Academy Bus LLC “defrauded New Jersey’s public transit corporation out of more than $15 million by underreporting trips its buses missed and billing for trips it never took.” The lawsuit was announced by Attorney General Gurbir Grewal, who said the bus company “bills itself as the largest privately owned and operated transportation company in the country.”

Image of a law gavel
Law Gavel; image courtesy of Activedia via Pixabay,

According to the suit, Academy allegedly “failed to report tens of thousands of missed trips over a six-year period ending in late 2018 to avoid assessments under its contract with New Jersey Transit.” The suit further alleges that “most of the trips were on routes serving the Hudson County waterfront, including service to New York City.” Oftentimes riders weren’t notified of the missed trips and were “left delayed or stranded.” 

As a result, the lawsuit argued the bus company violated an assortment of laws, including “state false claims and unjust enrichment laws.” It is seeking damages and civil penalties.

For those who don’t know, Academy operates tour and charter buses all throughout the Eastern United States, between Boston and Miami. The suit claims the “NJ Transit missed trips were the result of Academy shifting drivers from local routes to its more profitable charter routes.” It further argues:

“Academy bills NJ Transit roughly $12 million annually while NJ Transit collects the fares from its routes. Under the contract, NJ Transit would deduct an assessment for each missed trip…To avoid the assessments, Academy kept two sets of number…One tracked the actual number of trips missed, and the second reflected a significantly lower number that would be reported to NJ Transit.”

The suit also mentions a text message exchange between two employees who discussed “reducing the number of missed trips from 1,800 to 700.” One of the messages read: “Bro bro. It’s 1800 missed, really — we are gambling with this, huh?” That exchange was hardly an isolated incident. Over time, the bus company ended up reporting more than 800 trips for one month alone.” However, Academy continued to bill NJ Transit for trips its buses had canceled, effectively defrauding NJ Transit.

When commenting on the case, Grewal said:

“Most of us know how frustrating it can be to wait for a bus that doesn’t show up on time or never appears at all…Our complaint against Academy Bus alleges that one reason for those late and missing buses has been a pervasive, multi-year fraud by Academy that not only cost riders their time but also cost NJ Transit many millions of dollars. With this lawsuit, we are seeking justice for the riding public as well as New Jersey taxpayers.”


Lawsuit Says Bus Company Missed Trips, Defrauded NJ Transit

AG Grewal Files Lawsuit Alleging Academy Bus Defrauded NJ Transit by Not Reporting Missed Bus Trips, Charging for Trips that Never Happened Fraud Allegedly Cost NJ Transit over $15 Million

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