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LIHEAP Officials, Vendors in New Jersey and Virginia Sentenced for Fraud

January 19, 2011 -- LIHEAP administrators and oil company officials in New Jersey and Virginia were sentenced during the past two weeks for defrauding LIHEAP. Yet others in New Jersey have been sentenced for or are facing similar charges.

In the most recent sentencing, Denise Nicole Johnson of Paulsboro, N.J., was ordered to repay $23,000 after she pleaded guilty to official misconduct in a Gloucester County courtroom.

Johnson was a local administrator, serving Cumberland, Gloucester and Salem Counties, for New Jersey's LIHEAP from February 2005 through September 2006. Johnson conceded that she filed false applications to receive benefits for herself.

Johnson said she and others, including her boyfriend and the owner of an oil company, filed nine false applications between March 2006 and August 2009 to obtain money designated for heating oil. Under the plea agreement, Johnson faces four years in prison and will be barred from public employment in New Jersey. The judge set sentencing for July 15.

Johnson acknowledged that she cashed checks intended to pay for fuel, including some from Harris Fuel Oil of Paulsboro. The company's owner, Thomas J. Harris of Woolwich, has pleaded guilty to money-laundering and related offenses in connection with the scheme. He was sentenced last summer to four years in prison and ordered to make $400,000 in restitution.

Johnson is the third administrator to face prison for bilking the program, which is run out of New Jersey's Department of Community Affairs. Nicole Victor of Paulsboro, a former administrator for the program, was sentenced this month to five years in prison and ordered to pay $11,705 in restitution. Former administrator Constance Campbell of Chester was sentenced in July to five years in prison and ordered to pay $24,000 in restitution.

Charges are pending against Marvin Laws of Atlantic City, who allegedly stole $9,062 through false applications while employed with the program as a benefits manager in Atlantic County.

Meanwhile, a vice president of the Sterling Oil Company was sentenced in January to six months of incarceration after admitting that she used her position with the company to defraud the Virginia Energy Assistance Program.

Donna Beeler Hensley pleaded guilty to 62 counts of falsely certifying heating oil bills submitted to the Virginia Department of Social Services. She also was fined $10,000 and ordered to pay back $6,055 she bilked from the state. Sixty-two other counts were dropped as part of a plea bargain.

The investigation began in 2008 when a former Sterling Oil employee contacted the Virginia State Police.

Under a crisis provision in Virginia's LIHEAP, customers may qualify for a one-time emergency heating fuel delivery. As one of five state-authorized contractors in the area, Sterling Oil was one of the program's largest providers. Through the program, a client would be pre-approved for the maximum cost of a delivery. The prosecutor said the actual amount of fuel delivered would often be much less than the amount Hensley billed the state.

In a news release after sentencing, Hensley stated that because the program technically only allowed one delivery of fuel and because the customers' tanks would often not hold the entire amount allotted, she would certify the entire amount was delivered at once, then deliver the rest later.

Her attorney made a similar claim in court but could not provide any individual instances as evidence. The attorney also said there were times when no subsequent heating-fuel deliveries were made. Sterling Oil has been barred from being a vendor on any state contract.

Source: New Jersey and Virginia newspapers