School Bus Company at Center of Scandal Awarded New Contracts

A New Jersey school district awarded three new pupil transportation contracts to a company whose manager recently pleaded guilty to using unqualified drivers and operating unsafe vehicles.

Henry Rhodes, who manages two student transportation companies, pleaded guilty on March 6 to charges that he put children’s safety at risk by hiring unqualified bus drivers, including some with criminal records, according to The Bergen Record. Rhodes also admitted to getting lucrative student busing contracts for the companies by giving school districts bogus information about the company’s drivers’ credentials.

Previous Management Concerns 

The guilty plea came nearly three years after the first set of charges were filed against Rhodes and Shelim Khalique, who owns one of the companies, called A-1 Elegant. The Bergen Record reported that while the initial charges were pending, Rhodes admitted in his guilty plea that he engaged in the same type of driver-qualification scam with a separate company — American Star Transportation — owned by another Khalique brother, Jwel. 

In December 2022, School Bus Fleet reported that the Khalique brothers were arrested after New Jersey Attorney General Gurbir Grewal accused them of employing unqualified drivers – some with suspended licenses, arrest records, and criminal convictions – while misleading school districts about who was transporting their students.

The pair is accused of knowingly misrepresenting the qualifications of the company, its drivers, and aides, so that American Star could win contracts to transport students in various school districts, including Paterson, Jersey City, Mahwah, River Edge, and Franklin Lakes Public Schools.

Personnel files seized when a search warrant was executed revealed that A-1 Elegant employed numerous drivers who did not have valid commercial driver’s licenses or required endorsements and had suspended licenses and/or criminal records, according to the Attorney General’s Office.

State investigators say that after Shelim Khalique and Rhodes were indicted in the A-1 Elegant case, the company transferred its equipment, assets, and employees — including Rhodes — to American Star and continued to engage in similar misconduct. A 2020 investigation published by the USA TODAY Network New Jersey revealed that A-1 Elegant has been linked to operating with at least 21 different names since 2005.

As a result of that investigation, state lawmakers passed three new laws, including one to create an Office of School Bus Safety at the state Department of Education to monitor bus companies and owners repeatedly identified for bad practices and to oversee the company debarment process. The Bergen Record reported that as of January, that office had not been set up.

About the New Contracts

Paterson Public Schools awarded contracts to American Star Transportation. According to The Bergen Record, the contracts are worth $50,250. They cover three routes involving students from four city elementary schools and several daycare programs, according to public documents.

District officials told The Bergen Record that they are required under state law to award the contracts to American Star because the company bid the lowest price for the job and has not been disqualified by the state Education Department.

They also said American Star hired former a former Paterson police chief in January to check bus drivers’ credentials at the company’s yard before they start their routes in the morning.

The company is getting $18,907, or $259 per day, for routes for students at School 10, Paterson Day Care, and Gilmore day care, according to the school board contract resolution. The second contract is for $19,783, or $271 per day, for routes covering students at School 6, School 10 and the YMCA daycare.

A Paterson Public Schools spokesperson told the Paterson Press that the district did not want to pursue the lengthy process to debar American Star. In order to stop doing business with a contractor, the district would have to initiate a process that involves a formal complaint to the Passaic County executive superintendent of schools. It would then give the contractor the right to appeal any decision. The district has a "great need" for student transportation services and is in an area where there are few options, the spokesperson explained.

School Bus Fleet reached out to Paterson Public Schools for a statement on the contracts, and the district declined to answer questions on the matter.