Bottini Fuel skim scam costs $3.3M in criminal, civil penalties
A Hudson Valley fuel oil company that boasts of “guaranteed fair pricing” pleaded guilty Nov. 27 to falsifying business records in a scam to skim customers”™ money for its owners and friends.
Bottini Fuel of Wappingers Falls also agreed to pay nearly $3.3 million in criminal and civil penalties to compensate customers for their losses during the 12-year scheme.
The case was based on a whistleblower lawsuit filed in 2015.
The outcome was the first time the New York False Claims Act has led to a criminal conviction and restitution for victims, according to the whistleblower”™s law firm, Getnick & Getnick.
Bottini employs hundreds of people, according to the settlement agreement, and has annual revenue of more than $100 million.
The company claims it is the largest provider of heating oil and propane in the Hudson Valley, covering 10 counties as well as parts of New Jersey and Pennsylvania.
“When you”™re a Bottini Fuel customer,” the company”™s website states , “you never have to look at your delivery ticket and wonder, Am I getting a fair price? The answer is yes, every time!”
But sometimes customers overpaid. Customers bought fuel in the off-season, budgeted the wrong monthly average or mistakenly made duplicate payments or paid too much.
Normally, excess payments would be credited to the accounts or refunded. But in hundreds of cases, according to the settlement, Bottini transferred the balances to dummy accounts and then to accounts held by the company”™s owners, family members, friends, employees and related businesses.
Investigators calculated that Bottini skimmed $1,762,771.
Sixty victims were government customers ”“ schools, prisons, towns and state agencies ”“ that lost $590,887. The greatest government losses were to the Taconic Developmental Disabilities Services Organization, $281,630, and Green Haven Correctional Facility, $145,957. Bottini even stole as little as 27 cents from Arlington Central School District.
It was the ripoff of governments that upended Bottini.
The False Claims Act rewards whistleblowers who report fraud against governments. In August 2015, Dutchess Relator LLC was incorporated, and a month later the state and the relator sued Morgan Fuel & Heating Co., Bottini”™s parent company, in Supreme Court, New York County.
The whistleblower will receive $491,358 from the governments”™ portion of the restitution and penalties.
The whistleblower”™s identity “remains protected,” according to a news release by Getnick & Getnick, and his or her name has been redacted in the public version of the settlement agreement.
The settlement also covers Anthony Bottini, Brian Bottini and Mark Bottini, Carriage Hill Apartments LLC, Mid-Hudson Park Management Corp., Morgan Fuel & Heating, Toje Realty Inc. and Woodhill Fletcher Apartments LLC.
The defendants agreed to pay back $1,762,771 to customers and another $1.5 million in fines and penalties to the state. The attorney general”™s office will distribute the restitution funds. Money owed to customers who cannot be located will be deposited in the comptroller”™s unclaimed funds account.
Bottini also agreed that it will not apply the payments to state or New York City tax deductions or tax credits.
The heating oil fraud was investigated by the offices of state Attorney General Barbara D. Underwood and state Comptroller Thomas P. DiNapoli. The criminal case was filed in Wappingers Falls Justice Court.
Justin Wagner, an assistant attorney general, represented the state. Manhattan attorney Paul R. Grand represented Bottini. Neil V. Getnick represented the whistleblower.