A South Jersey trucking and logistics company is disputing allegations made by a labor union that it failed to disclose a criminal conviction on its application for $79 million in tax breaks.
The company, NFI, said the affiliate that pleaded guilty in a 2005 case was dissolved years before NFI applied for tax credits in 2016. “We have fully complied with all of the requirements” of the application process for Grow New Jersey tax credits, NFI spokesperson T.J. Lynch said in a statement.
The tax credit program is overseen by the state’s Economic Development Authority.
“We have reviewed the letter sent by the Teamsters Union to the EDA and, as is typical of the Teamsters’ tactics, it is littered with inaccuracies and misinformation,” Lynch said.
The Teamsters called for an investigation and prosecution of NFI in a letter Thursday to the EDA and New Jersey Attorney General Gurbir S. Grewal. The union alleged that NFI had failed to disclose on its application for tax credits a 2005 criminal conviction of an NFI affiliate, as well as pending civil claims alleging violations of wage and labor laws.
Companies that apply for tax credits have to certify that statements on their applications are true.
The letter came amid broader investigations of the EDA’s multibillion-dollar tax credit programs: one by a task force appointed by Gov. Phil Murphy, and another by a state grand jury. NFI, along with South Jersey Democratic power broker George E. Norcross III and several other companies, has sued the governor, claiming the task force was created unlawfully and should be disbanded. The suit also names the EDA as a defendant.
Citing pending litigation, the EDA declined to answer questions about whether the agency advised NFI on whether it had to disclose the criminal conviction of a dissolved affiliate, or whether any agency policies address those circumstances.
The EDA in 2017 awarded $245 million in tax breaks – to be dispensed over a 10-year period – to NFI, Norcross-led insurance brokerage Conner Strong & Buckelew, and developer the Michaels Organization to build an office tower on the Camden waterfront. The companies pledged to bring jobs to the struggling city.
On Thursday, the Teamsters pointed to a 2005 case in which a company called Interactive Logistics Inc. pleaded guilty in federal court in Camden to defrauding beer maker Anheuser-Busch of $225,000.
Interactive Logistics was registered to do business in New Jersey as NFI Interactive Logistics Inc. Court records show the plea agreement — covering three counts of wire fraud — was authorized by the company’s three shareholders, including Sidney Brown, who is now chief executive of NFI and who signed the company’s 2016 application for tax credits.
At the time of the guilty plea, Brown told the news media in a statement: “We as a company made an isolated error and will work to ensure this never happens again.”
Applicants for the Grow New Jersey tax incentive program are asked whether they or any affiliates have been found guilty or liable of criminal violations, including in the performance of a public or private contract. NFI answered that it had not.
On Friday, Lynch said: “With respect to the 2005 case ... the entity involved in that legal proceeding was dissolved in 2011 and, as a result, is not an affiliate of NFI.”
Lynch did not respond to follow-up questions about whether the company received advice from the EDA or anyone else on how to handle that disclosure issue.
The Teamsters also alleged that NFI failed to disclose two civil cases in response to a question about whether the company was a party to any pending legal proceedings. The question covers alleged violations of laws governing hours of labor, prevailing wage standards, and discrimination in wages.
NFI marked “no” on that part of the application.
In its statement Friday, NFI said it submitted a supplement to the EDA describing the existence of lawsuits. "The EDA requested additional information about certain litigation, which we promptly provided,” it said.
According to records obtained by The Inquirer, an application supplement from NFI said the company had “been party to employment-related litigation in the ordinary course of its business.” The lawsuits, NFI said, involved “allegations of discrimination and harassment,” among other claims.
The supplement did not specifically mention the two pending cases identified by the Teamsters.
One suit, brought by truck drivers, alleges violations of state wage law. The other says the company failed to pay overtime to workers in Texas in violation of the federal Fair Labor Standards Act. NFI has denied wrongdoing in both suits.