Company owner admits stealing $5 million in employee funds

By Charlie Morasch, Land Line contributing writer | Monday, December 17, 2012

The owner of several New Jersey trucking companies has pleaded guilty to his role in embezzling money from employee benefit plans.

According to the U.S. Department of Transportation Office of Inspector General, Nicholas Farnsworth pleaded guilty Dec. 10 in U.S. District Court in Brooklyn, NY, to charges of conspiracy to embezzle tied to the scheme.

Farnsworth, the owner and operator of New Jersey-based Rainbow Transport, worked with a unionized trucking company to “defraud union benefit funds from their employees on projects receiving federal transit administration grant funds.

Employees working on the projects were deprived of paid benefits for the DOT-funded projects, including the Port Authority of New York & New Jersey’s World Trade Center Transportation Hub project.

Investigator determined the loss to the Union Benefits Fund is $5 million.

Rainbow Transport is not a unionized company.

The investigation was conducted jointly between the U.S. Department of Labor – Office of Labor Racketeering and Fraud Investigations; the Employee Benefits Security Administration; the Port Authority of New York & New Jersey OIG; the Internal Revenue Service Criminal Investigation Division; the Metropolitan Transit Authority OIG; and the New York City Business Integrity Commission.

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