AG Grewal Moves to Intervene in Suit Accusing Telecommunications Contractor of Failing to Pay Prevailing Wages and Submitting False Claims to State

Contractor Allegedly Billed UMDNJ, Successor Entities for Prevailing Wage Work But Failed to Pay Prevailing Wage Rates, Denying Workers at Least $392,000 in Wages Owed

September 10, 2020

TRENTON, NJ (MERCER)–Seeking to hold accountable a company that allegedly defrauded the State while denying workers hundreds of thousands of dollars in wages, Attorney General Gurbir S. Grewal today filed court papers to intervene in a lawsuit being pressed against the company by a former employee.

In a motion to intervene and proposed complaint filed in New Jersey Superior Court, the State alleges that Adalex Enterprises Corp. (which does business as Adalex Communications) and its affiliate, Advance Telecom Resources, Inc., (together, “Adalex”) committed multiple violations of the New Jersey False Claims Act between 2010 and 2017, while contracted to perform telecommunications work for the University of Medicine and Dentistry of New Jersey (“UMDNJ”) and UMDNJ’s successor entities (collectively, “State Entities”).  UMDNJ was restructured in 2013, with most of its units being integrated into Rutgers University. 

Adalex Communications | 145 Talmadge Road Ste 15 Edison, NJ 08817

The complaint alleges that Adalex submitted nearly 1,400 false claims to the State Entities in invoices for work subject to prevailing wage laws. According to the State, Adalex impliedly represented that its workers were being paid in accordance with the prevailing wage laws, while, in fact, the company paid its workers only a fraction of the required rates, shorting them by at least $392,046 in the aggregate. 

“Through this action, we seek to hold accountable a company that allegedly pocketed hundreds of thousands of dollars that should have been paid to its workers,” said Attorney General Grewal. “We are committed to protecting New Jersey workers by ensuring they receive the wages they’re due under the law, and we will take action against any contractor who tries to defraud the State – and take advantage of New Jersey taxpayers – with falsehoods about its costs.”

Among the categories of telecommunications services that Adalex provided to the State Entities between 2010 and 2017 were infrastructure work, such as cable installation and repair; day-to-day operational support; and other work based on purchase orders.

Each of these categories included work to be performed by either a “journeyman” electrician or a “foreman,” with workers required by law to be paid the prevailing wage for work they performed.

The State’s complaint notes that UMDNJ’s Request for Proposal (RFP) on the contract included language indicating the winning bidder must pay its workers prevailing wages for prevailing wage work. The complaint also asserts that, as early as November 2010, UMDNJ’s manager of purchasing sent a letter to Adalex making plain that prevailing wage laws applied under the contract.   

Nevertheless, today’s court filings allege that, throughout the course of the contract, Adalex paid its employees well below prevailing wages for their prevailing wage work. 

The complaint includes multiple examples illustrating how Adalex paid workers at an effective rate of less than $30 per hour, including benefits, while billing the State Entities in excess of $100 per hour for their labor. Under prevailing wage laws, the employees should have been paid more than twice as much.

The alleged fraud came to light after former Adalex employee Russell Mollica, who served as a project manager on the UMDNJ contract, filed a whistleblower lawsuit against Adalex in 2016. Mollica alleges that he was terminated in June 2015, shortly after advising his employer in writing that it was not in compliance with prevailing wage laws governing the UMDNJ contract.

The State initially declined to join Mollica’s lawsuit, but with today’s filing seeks permission to participate in the wake of intervening developments, including an attempt by Adalex to settle Mollica’s lawsuit without compensating the State for its fraud.

The State is represented in this matter by Assistant Attorney General Janine Matton of the Division of Law’s Affirmative Civil Enforcement Practice Group and Deputy Attorney General and Section Chief Lara Fogel, Deputy Attorney General and Assistant Section Chief Kenneth Levine, Deputy Attorney General Carla Pereira, Deputy Attorney General Dana Vasers, and Attorney Jedediah Pencinger, all of the Government and Healthcare Fraud Section.