Construction Executives Arrested in Newark Lead Pipe Replacement Fraud Scheme

CEO and Foreperson Allegedly Defrauded Newark in Multi-Million-Dollar Lead Service Line Replacement Program

Newark, NJ — The CEO of a construction company and a foreperson were arrested today for allegedly conspiring to commit wire fraud in connection with the Newark Lead Service Line Replacement (LSLR) Program, U.S. Attorney Philip R. Sellinger announced. Michael Sawyer, 57, of Burlington, NJ, and Latronia Sanders, also known as "Tee," 55, of Roselle, NJ, face charges of conspiracy to commit wire fraud and are scheduled to appear before U.S. Magistrate Judge Michael A. Hammer in Newark federal court.

“As our complaint alleges, Michael Sawyer and Latronia Sanders worked for a company hired by the city of Newark to replace lead pipes, but instead, they intentionally left lead pipes in the ground. 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. Today, we begin the process of holding them accountable,” said U.S. Attorney Philip R. Sellinger.

The LSLR Program was launched in March 2019 in response to dangerously high levels of lead found in Newark’s drinking water, impacting both local schools and city-wide water supplies. Newark initiated an effort to replace approximately 18,000 lead service lines, enlisting multiple contractors, including JAS Group Enterprise Inc. (JAS), to handle the replacement work. Michael Sawyer served as president and CEO of JAS, while Sanders was employed as a foreperson overseeing crews for the project.

“For years, lead pipes that transport drinking water to homes in Newark remained buried in the ground after the city hired a company to replace them,” Newark FBI Acting Special Agent in Charge Nelson I. Delgado said. “The business, along with others, were paid to replace the water service lines because any amount of lead exposure is detrimental to people's health, particularly for children. 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.”

According to federal documents, Sawyer, Sanders, and others conspired to defraud the City of Newark by failing to replace all the lead pipes at designated locations, contrary to contractual obligations. Despite the incomplete work, they submitted payment requests that falsely claimed the replacements had been completed. The allegations also include submitting misleading documents, including deceptive photographs, to support these fraudulent payment claims.

In some cases, the conspirators falsely reported the installation of copper pipes after purportedly removing lead pipes, even at sites where copper piping had already been installed. These fraudulent actions led to the submission of false payment applications, ultimately inducing Newark to pay JAS for work that was never performed.

“These defendants allegedly undercut Newark’s lead service line replacement project that sought removal of all lead lines throughout the city,” Special Agent in Charge Tyler Amon with Environmental Protection Agency’s (EPA) Criminal Investigation Division in New Jersey said. “Violators who employ deception to compromise the integrity of important public drinking water-related projects will be criminally investigated and held to account.”

The charges of conspiracy to commit wire fraud carry a potential penalty of up to 20 years in prison and a fine of up to $250,000, or twice the gross profits or losses linked to the offense, whichever is greater.

The investigation was conducted by special agents from the FBI, EPA Criminal Investigation Division, EPA Office of Inspector General, and U.S. Department of Labor Office of Inspector General, with U.S. Attorneys Edeli Rivera, Clara Kim, and Katherine Calle of the Special Prosecutions Division in Newark leading the prosecution.

The allegations in the complaint are accusations, and Sawyer and Sanders are presumed innocent unless proven guilty.