Contractors lied about replacing lead water pipes in Newark, federal prosecutors say

The Lead Service Line Replacement Program in Newark, touted as a major success and a blueprint for other U.S. cities, was tainted Thursday after federal prosecutors alleged that one of the contractors hired to replace lead pipes didn't fully finish the job.

JAS Group Enterprise, Inc. had received more than $10 million through its contract with New Jersey's most populated city to implement the plan to replace all its lead water pipes after consecutive tests showed elevated lead levels exceeding the federal limit in 2017, according to U.S. Attorney Philip Sellinger, who is accusing the real estate construction development firm of fraud.

From the beginning of 2020 to 2022, the company led by CEO Michael Sawyer allegedly submitted photos of pipes that were already made of copper and claimed that they had replaced them. Another person accused of defrauding the city of Newark is Latronia Sanders, JAS's foreperson who oversaw crews replacing lead pipes, according to the criminal complaint.

They "deliberately instructed workers to leave lead pipes in the ground," Sellinger said. The photographs submitted to inspectors were either blurry or dirt was concealing lead pipes that remained in the ground.

Sanders is accused of sending text messages falsely intended to make inspectors believe that the work the company was contracted to perform was not necessary because there were no lead pipes. Where copper pipes already existed, crews were allegedly told to clean and polish them to make them appear newly installed.

"One witness estimated that another JAS foreperson instructed the crews to do this at hundreds of sites," Sellinger added.

Newark's undertaking of replacing approximately 20,000 lead services to homes was a pricey project that was expected to take up to a decade. However, an ordinance passed by city officials that allowed for access to the pipes without landlord approvals fast-tracked the massive infrastructure project in under three years.

The water crisis came to a head in 2018 when the Natural Resources Defense Council, an environmental advocacy group, sued Newark and claimed the city had acted too slowly and downplayed the danger to residents after a corrosion control system was found to be failing.

To prevent a public health crisis similar to Flint, Michigan, the city added a different chemical to the water that acted as a coating on the inside of the lead pipes, but eventually had to distribute water filters, and in some cases bottled water, to residents after the U.S. Environmental Protection Agency found high lead levels in some locations in 2019 despite the filters.

Any amount of lead exposure, even at levels below the federal actionable standard of 15 parts per billion, is detrimental to health, particularly for children, according to the EPA.

At a news conference Thursday, Newark Mayor Ras Baraka emphasized that the health of residents wasn't in danger due to the alleged actions of contractors because orthophosphate added to prevent corrosion was working as intended. For the past eight or nine months, Baraka said federal investigators were working to locate leftover pipes, and due to the ongoing investigation, they weren't able to notify the public.

"We're proud of the work that we've done and we're happy that we've come to an end," Baraka said. "When the U.S. attorney identified initial sites, we went to those sites. We changed what they showed us immediately that day. We continue to do that as we go. I don't want us to have this assumption that people were at risk of being exposed to lead because that never, ever was the case."

In total, about 1% of the pipes were affected by JAS's crews.

Newark officials have excavated about 400 sites where JAS claimed to have performed its work, Sellinger said. Among those, 28 were found to have lead pipes that should have been replaced. Sawyer oversaw 14 of those sites, the prosecutor added. EPA investigator Tyler Amon added that any lead pipes that have been discovered were replaced.

Sawyer and Sanders are charged with conspiracy to commit wire fraud. If found guilty, they face a potential penalty of 20 years in prison and a fine of $250,000, twice the gross profits, or twice the gross loss suffered by the victims of the offense, according to the U.S. Attorney District of New Jersey's Office.

NBC New York has reached out to attorneys representing Sawyer and Sanders. Sawyer's attorney had no statement at this time, and Sanders' attorney has not responded to a request for comment.