SBF 70 years logo
MenuMENU
SearchSEARCH

School Bus Company at Center of Scandal Awarded New Contracts

Criminal charges are pending against American Star Transportation's owners. A manager for the company also just pleaded guilty to using unqualified drivers and operating unsafe vehicles.

by SBF Staff
March 23, 2023
School Bus Company at Center of Scandal Awarded New Contracts

Paterson Public Schools officials said they are required under state law to award contracts to American Star because the company bid the lowest price for the job and has not been disqualified by the state Education Department.

Photo: Canva/American Star Transportation/School Bus Fleet

4 min to read


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.

Ad Loading...

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.

Ad Loading...

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.

Ad Loading...

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.

Safety in Mind: New Jersey School Bus Safety Bills Signed Into Law

More Safety

A close up detail of the back of a school bus with text reading "Insight From 10 Years of NHTSA Data."
Safetyby Elora HaynesJuly 22, 2026

NHTSA Releases 10-Year Review of Fatal School Bus Crashes

The latest federal analysis reinforces the safety of school buses while identifying where school-age pedestrians and other motorists remain most at risk.

Read More →
Graphic for a School Bus Fleet news story featuring the NASDPTS logo, a speaker presenting with a microphone, and the headline, "38.4 Million Stop-Arm Violations," highlighting annual illegal school bus passing estimates.
Safetyby Amanda HuggettJuly 21, 2026

2026 NASDPTS Survey: Data Shows Further Reduction of Illegal Passing

New data is in! School bus stop-arm passings are down to 38.4 million violations per year, about a 2.3% decrease from last school year — but passings on the right side of the bus are higher than ever.

Read More →
Graphic illustrating a fatal school bus incident in New York, featuring a close-up view of the front of a yellow school bus with a cracked-glass overlay and the headline, "7-Year-Old Fatally Struck in New York," dated July 9, 2026, alongside the School Bus Fleet logo.
Safetyby Staff and News ReportsJuly 9, 2026

Another School Bus Fatality Reported in Monsey, New York

A 7-year-old girl died after being struck by a school bus in Rockland County, New York while crossing the street. Here's what we know.

Read More →
Ad Loading...
School buses at NSTA's SBDISC Roadeo with text reading "School Bus Drivers Put Their Skills to the Test."
Safetyby Staff and News ReportsJune 30, 2026

NSTA Announces 2026 School Bus Driver International Safety Competition Winners

Drivers from across the U.S. and Canada showcased their safety and driving skills, with two defending champions successfully retaining their titles.

Read More →
zonar system image
SponsoredJune 22, 2026

The Driver Shortage Playbook

Driver shortages are still a major challenge for student transportation fleets, but the real issue has shifted. It’s no longer just about filling seats quickly. It’s about finding safe, reliable drivers who meet performance expectations and want to stay. The Driver Shortage Playbook covers why traditional recruitment tactics are falling short and how school fleets are adapting with smarter hiring, stronger retention strategies and a greater focus on driver quality.

Read More →
Promotional graphic for a new Pro-Vision AI camera system. The image shows a monitor displaying camera views with AI object detection overlays, along with multiple cameras and recording hardware. Text reads "New Product," "Pro-Vision," and "Visibly Better." School Bus Fleet logo appears in the lower-right corner.
SafetyJune 11, 2026

Pro-Vision Launches AI-Powered 360° Camera System

The new Birdseye camera delivers real-time AI-based pedestrian and vehicle detections, full visibility around the bus, and telematics integrations.

Read More →
Ad Loading...
A New York school bus in the street.
Safetyby Elora HaynesJune 9, 2026

N.Y. & N.J. Coalitions Call for Modernized Transportation for Vulnerable Students

New statewide coalitions in New York and New Jersey are urging lawmakers to expand student transportation options for vulnerable students amid ongoing driver shortages.

Read More →
Graphic for an opinion article on illegal school bus passing. A school bus with its stop arm extended is stopped as children cross the street, while a black SUV drives past. Headline reads, “America’s School Bus Blind Spot.” School Bus Fleet branding appears in the corner.
SafetyJune 8, 2026

America Has a School Bus Passing Problem — and Distraction Is Making It Worse

Illegal school bus passing remains a major safety threat as distracted driving rises. This op-ed explores why awareness, enforcement, and stop-arm cameras matter more than ever.

Read More →
A black, white, and red graphic with an image of a school bus on a New York street and text reading "Legislative Roundup May 2026."
Safetyby Elora HaynesMay 29, 2026

School Bus Laws to Watch: New York Delays EV Mandate

Plus, federal lawmakers seek new funding for school bus safety as states weigh stop-arm enforcement, disability protections, and education spending.

Read More →
Ad Loading...
Emergency response personnel assist participants evacuating through the rear emergency door of a yellow school bus during a hands-on safety training exercise at Prosper ISD. Smoke fills the bus interior as responders demonstrate emergency evacuation procedures.
Safetyby News/Media ReleaseMay 21, 2026

Operation STEER Brings Emergency Response Training to North Texas

Prosper ISD hosted the third annual training for transportation professionals across 67 districts to learn how to respond to emergencies, such as rollovers and evacuations, and proper use of safety equipment.

Read More →