Henry Rhodes, 59, of Paterson, has pleaded guilty to two counts relating to one of those transportation companies, A-1 Elegant Tours Inc., and two counts involving the other business, American Star Transportation. Rhodes entered his plea on Monday, March 6, 2023 before state Superior Court Judge John Zunic, presiding in Essex County.

It marked the first plea deal in connection with the cases against the two bus companies, which allegedly provided false information to school districts about their equipment, hiring practices and staff in order to secure contracts to transport students, in violation of the law.

Charges against A-1 Elegant were first filed in June 2020. Personnel files seized during the execution of a search warrant revealed that A-1 Elegant employed numerous drivers who did not have valid commercial driver’s licenses or required endorsements, had suspended licenses, and/or criminal records. It was also alleged that A-1 Elegant employed bus aides with criminal records. Plus the company allegedly failed to maintain mandatory fingerprinting, background-check and drug-testing records.

It is alleged that the defendants’ failure to maintain proper records and purposeful obfuscation of the quality of its drivers endangered the lives of school children. A number of drivers were confirmed to be unlawfully driving buses, including two former A-1 Elegant bus drivers who drove buses with one or more children on board while under the influence of narcotics, resulting in a bus crash in Essex County. Investigation further revealed that the defendants employed over 30 drivers with criminal convictions, including a Megan’s Law registrant.

Investigators say that after that company, its owner Shelim Khalique, and Mr. Rhodes were indicted by the state grand jury, A-1 Elegant’s equipment, assets and employees — including Mr. Rhodes — transferred to Paterson-based American Star. And the State further alleges that American Star continued to engage in similar conduct.

After A-1 Elegant was indicted in March 2021 and its assets were transferred, a driver for American Star was pulled over by a River Edge police officer on February 21, 2022 because the bus he was operating ran a stop sign. Investigators say the driver was found to be unlicensed and had a pending case for patronizing a prostitute.

Further investigation into American Star showed that, as was the case with A-1 Elegant, documents were submitted to school districts certifying that the company’s drivers and aides were properly vetted and licensed as required by state law, when in fact employees who were not properly licensed, and in some cases had criminal backgrounds, were transporting the students. Rhodes, a manager of A-1 Elegant, was employed in a supervisory capacity at American Star.

“Mr. Rhodes has acknowledged playing a leadership role at these companies that misled and defrauded school districts and put children’s lives in danger,” said Attorney General Matthew J. Platkin. “Now he will be held accountable for not only committing these offenses, but also continuing to engage in the same crimes even after he and his employers were charged the first time.”

“These cases came to light after traffic offenses and in one case, a crash occurred. Further investigation revealed that some of the bus drivers employed by these companies were unfit for the job, drove impaired or had criminal histories, underscoring the danger to students,” said Thomas Eicher, Executive Director of the Office of Public Integrity and Accountability. “It is important that those behind these operations are brought to justice.”

Rhodes pleaded guilty to two counts of second-degree conspiracy and two counts of second-degree theft by deception for conduct stemming from his involvement with the two bus companies.

As part of the plea agreement the defendant agreed to be barred from doing business with the State of New Jersey or any of its administrative or political subdivisions for a decade. He cannot personally or through any business entity submit a bid, enter into any contract, or conduct any business with any board, agency, authority, or other body of the state.

Prosecutors will be recommending Rhodes be sentenced to two concurrent four-year terms in state prison as a third-degree offender.

The investigation was a collaboration between the New Jersey State Police Official Corruption Bureau, the Essex County Prosecutor’s Office, the Passaic County Prosecutor’s Office, and the OPIA Corruption Bureau, under the leadership of OPIA Executive Director Thomas Eicher.

Defense attorney

For Rhodes: Howard Lesnik, Esq., of Mountainside, N.J.