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Pennsylvania Transit Company Owner Charged in $500K Grant Fraud Scheme

On October 20, 2015, an Information was filed in U.S. District Court, Williamsport, Pennsylvania, charging Robert Else, III, former President, King Coal Tours, Mount Carmel, Pennsylvania, with wire fraud for his involvement in a grant fraud scheme. King Coal Tours allegedly submitted inflated annual budgets and false monthly expense reports to the Pennsylvania Department of Transportation (PennDOT) and the Federal Transit Administration (FTA) for financial assistance to provide public transportation via his private bus company.

The FTA provided grant funds through PennDOT to local Pennsylvania communities, including Mount Carmel Borough, to develop and maintain public transportation systems. Mount Carmel, through its transportation service agency, the Lower Anthracite Transportation System (LATS), entered into annual contracts with King Coal Tours to provide fixed-route public transportation services. King Coal Tours primarily operated as a charter bus business, but also entered into annual cost-plus contracts with Mount Carmel to provide transportation services to LATS between 1984 and 2012. 

The Information alleged that Else overbilled and submitted false invoices for expenses incurred not under the LATS contract, but rather for expenses incurred for King Coal buses used in its private tour business. The investigation specifically revealed that Else and King Coal Tours overbilled for approximately 68,745 gallons of tax-free diesel fuel, inflated invoices for approximately 120 replacement tires, billed parts and labor hours related to the maintenance of King Coal Tours owned charter buses, and illicitly billed for administrative hours of office personnel.

We are conducting this investigation with the Federal Bureau of Investigation with assistance from the FTA. 

Note: Indictments, informations, and criminal complaints are only accusations by the Government. All defendants are presumed innocent unless and until proven guilty.