Maryvale school bus service tenders go to court

The Maryvale School District is being sued by bus company First Student after the district awarded its transportation contract to a local company that First Student says has an owner who is a convicted felon with a history of defrauding the government.

The district is accused of violating public bidding laws by failing to reject a bid from WNY Bus Co., a Depew-based school bus company, First Student wrote in a lawsuit filed July 3 in Erie County Supreme Court.

In February, Maryvale issued a request for proposals for a five-year school transportation contract. According to the complaint, only First Student and WNY Bus Co. responded to the request for proposals.

First Student, which had provided school transportation services in Maryvale for more than 20 years, claims it submitted the lowest, most responsive and responsible bid, but the district illegally awarded the contract to WNY Bus Co. in March.

WNY Bus Co. is not a responsible company because one of its owners, Igor Finkelshtein, “has a notorious history of defrauding the government and committing crimes that reveal a lack of integrity,” First Student wrote in the lawsuit.

Maryvale Superintendent Joseph D’Angelo did not respond to the specific allegations in the lawsuit and said district attorneys were reviewing the complaint and would “address the issues raised by First Student in court.”

In an interview with the Buffalo News, Finkelshtein called the lawsuit “completely absurd.” He said WNY Bus Co. won the contract fairly because it bid $20.8 million, while First Student bid $25.7 million.

“Maryvale made the right choice in selecting WNY Bus Co.,” he said.

First Student highlighted Finkelshtein’s legal issues in the lawsuit to support its claim that Maryvale illegally awarded the contract to WNY Bus Co., although Finkelshtein said he is not a major shareholder of WNY Bus Co. and is not the decision maker.

In 2017, Finkelshtein pleaded guilty to a felony charge of filing a false tax return.

According to a plea agreement he signed, Finkelshtein underreported income from his taxi and medical transportation company, Buffalo Transportation Inc., from 2007 to 2010. He deposited nearly $300,000 in cash from the business into personal bank accounts to hide the income from the IRS, according to the plea agreement.

Finkelshtein was sentenced to two years of probation. He owed $84,757 in taxes to the IRS and was ordered to pay a $20,000 fine.

The federal government also filed a lawsuit against Finkelshtein and his companies, accusing them of failing to disclose Finkelshtein’s prior felony when filing applications for government-offered business loans during the COVID-19 pandemic in 2020 and 2021. Business owners who had been convicted of a felony in the past five years were not eligible for the loans, according to the complaint.

Four of the companies Finkelshtein is involved with received nearly $8 million in loans and a $20,000 grant. According to the complaint, $5 million in loans were forgiven, and WNY Bus Co., in particular, received $1.3 million in loan forgiveness.

Finkelshtein said he did not fill out loan application forms and that the person who did was unaware of his prior conviction. The wording of the application was also unclear, Finkelshtein said.

He paid $92,000 to settle the case.

Additionally, in 2021, the Cheektowaga Central School District accused WNY Bus Co. of unilaterally canceling its transportation contract because the company “anticipated that the profit margin was minimal,” according to the complaint.

Finkelshtein said the case with Cheektowaga Central has been settled and WNY Bus Co. is still providing transportation services for the district. He says the district had to file the lawsuit in court to restart the bidding process so WNY Bus Co. could adjust its prices as the company struggled during the pandemic.

“We transported the kids from Cheektowaga Central around the clock,” he said. “The contract was never interrupted for a day.”

Based on the reasons set forth in its complaint, First Student asks the court to cancel and set aside the contract between Maryvale and WNY Bus Co. and return it to First Student.

Finkelshtein claims that First Student, an Ohio-based company that operates across the United States and Canada, filed the lawsuit in an effort to eliminate competition by buying up smaller bus companies or forcing them out of business.

First Student has offered in the past to buy WNY Bus Co., he said.

“This is typical behavior by companies looking to get rid of a local bus company,” Finkelshtein said. “We provide excellent, reliable and safe service to students attending local schools in Western New York and we save taxpayers money.”