Federal authorities have charged two individuals from a New Jersey construction company with defrauding the city of Newark out of $10.2 million for lead pipe replacement work that was never performed. Michael Sawyer, CEO of JAS Group Enterprise Inc., and Latronia Sanders, a foreperson, are accused of submitting false documentation to the city to conceal their failure to replace lead water service lines with copper pipes, according to a federal complaint.

NJ Contractors Accused Of $10M Fraud : Fraudulent Scheme and Arrests

Sawyer, 57, of Burlington, and Sanders, 55, of Roselle, were charged with conspiracy to commit wire fraud, a crime that carries up to 20 years in prison. The U.S. Attorney for New Jersey, Philip R. Sellinger, announced the charges Thursday, following the pair’s scheduled appearance in federal court before U.S. Magistrate Judge Michael A. Hammer in Newark.

The charges stem from Newark's large-scale project to replace around 18,000 lead water service lines, which connect homes to the city’s water mains. The initiative began after high levels of lead were detected in Newark’s water supply in 2016, prompting a public health crisis. JAS Group Enterprise was among the contractors hired in 2019 to perform this critical work.

NJ Contractors Accused Of $10M Fraud : Allegations of Fake Reports and Photos

Federal authorities allege that Sawyer and Sanders intentionally left lead pipes in the ground while falsely claiming to have replaced them with copper pipes. To support their deception, JAS submitted fraudulent photographs and verification forms, leading the city to believe the replacements had been completed. In some instances, the company reportedly polished existing copper pipes and passed them off as newly installed replacements.

"By causing misleading photographs and verification forms to be submitted, Sawyer and Sanders concealed that they intentionally did not replace lead pipes and defrauded Newark by collecting payment for work they did not properly perform," U.S. Attorney Sellinger said.

Public Health and Financial Consequences

The failure to replace the lead pipes posed serious risks to public health, particularly for children, as any exposure to lead can have detrimental effects. Newark FBI Acting Special Agent in Charge Nelson I. Delgado emphasized the harm caused by the fraudulent actions: “We allege the subjects in this investigation knew they were not replacing the lead pipes, and then passed off misleading photos to conceal the ones they left in the ground.”

Newark Mayor Ras Baraka expressed outrage over the fraud, highlighting the gravity of compromising public health for profit. “It is terrible, especially at this level, because we're talking about something that is a public health crisis,” Baraka said during a news conference.

Legal Representation and Potential Penalties

Sawyer and Sanders face severe penalties if convicted, including up to 20 years in prison and fines of $250,000 or double the amount of the profits or losses involved. Their attorneys, Julie Grohovsky and Catherine M. Recker, respectively, had not yet commented on the charges as of Thursday.

The federal case is being handled by Assistant U.S. Attorneys Edeli Rivera, Clara Kim, and Katherine Calle.