The cops were so proud of their new ride, they bragged about it on social media.
The Atlantic City police angled the $73,000 patrol car on the boardwalk, capturing the Ford Mustang's sleek lines and custom vinyl wrap in a video.
"We're proud that this Mustang Mach-E is the first all-electric vehicle in Atlantic City," Chief James Sarkos said in a 2023 news release.
The 2022 Mustang was purchased with opioid settlement funds, the former assemblyman had discovered, money earmarked for prevention, outreach and drug treatment for the thousands swept up in the deadly epidemic. Since 2022, millions in such funds have poured into New Jersey towns, counties and the state itself, proceeds from a legal settlement with the pharmaceutical giants that fueled the three-decade crisis.
Those proceeds were intended to help people caught in the web of addiction. People like Armato's son, Derek, who fatally overdosed in 2020.
"This is blood money," Armato said. "Hundreds of thousands of people are dying because of this."
And it turns out, Atlantic City wasn't the only New Jersey municipality squandering those funds on lavish expenditures and wishlist items instead of their intended purpose, according to experts, advocates and some state officials.
At least 25 towns have exploited vague settlement language and ambiguous guidelines, spending opioid funds in ways that violate the spirit — and even the letter — of the 2021 national agreement, a 2022 state Attorney General's memorandum and the 2023 state Opioid Law, an NJ.com analysis has found (see chart below). About $2.3 million has been spent or allocated to these purchases, according to an examination of hundreds of municipal reports submitted to the state. In some cases, the money was diverted to buy monogrammed jackets, purchase K9 dogs and identify broken streetlights.
John Armato has been fighting questionable opioid settlement spending for years. He gazes at a photo of his late son, Derek, at his home in Buena Vista. Derek Armato died of a drug overdose in 2020. Joe Warner | For NJ.com
The $1.1 billion windfall — half of which is going directly to towns — came after New Jersey settled a national lawsuit against Purdue Pharma, Johnson & Johnson, CVS and 10 other painkiller manufacturers, distributors and pharmacies. The long-awaited proceeds were intended to fund addiction services, prevention efforts and treatments like buprenorphine, not muscle cars and frosted glass windows, experts say.
♦ Besides the Mustang, Atlantic City reported spending $137,026 on clothing, backpacks, consulting services and a city workforce program for the homeless, records show.
♦ East Hanover spent almost $4,000 on frosted windows for a police training room. Pennsauken gave some EMS workers a 50% hourly pay bump. And Camden paid a nonprofit nearly $150,000 to document broken streetlights, to name just three.
♦ Yet the state has done little to hold anyone accountable, despite municipalities having to report how they use the money. And a handful of agencies have passed the buck on oversight — even as the comptroller's office warned of misuse and pressed for enforcement in a searing 2025 report.
"I'm upset that these things are happening, and I'm even more upset that there's no accountability," said Sandy Gibson, an addiction researcher and counselor at The College of New Jersey. "Is there no accountability built into this process?"
"This is blood money. Hundreds of thousands of people are dying because of this."
John Armato, former state assemblyman
Meanwhile, more than $53 million in settlement funds have sat unused in municipal accounts for as long as three years as of June 2025. Yet cash-strapped nonprofits on the front lines of substance abuse services say they are struggling to find funding to help those in the throes of addiction.
The flood of settlement money, set to be distributed through 2040, was initially hailed by experts and families of the addicted. Finally, they thought, there was some measure of restitution — and a possible pathway out of a crisis that has killed 30,000 in New Jersey and left another 150,000 with opioid use disorder.
Armato, 78, had witnessed opioids flood the streets, first destroying his son, then his constituents. Now the Buena Vista man watches as those entrusted to right those wrongs — both distressed cities and affluent suburbs — squander the money to stop it.
He has tried to sound the alarm with state agencies and former colleagues in the Legislature. But he's been met with mostly silence.
"People don't care," Armato said.
Atlantic City spent $73,000 in opioid settlement funds on a 2022 Ford Mustang patrol car. Advocates and some state officials have criticized the purchase and others as misuse of funds intended for drug prevention, treatment and outreach for those addicted. Courtesy of Atlantic City
The electric Mustang. A car for a school resource officer. Defibrillators and ambulances.
Some towns have stretched the bounds of the settlement guidelines to spend on drug enforcement and even general policing and public safety wishlist items, experts say.
"I'm trying to think of words that I would be willing to say in a newspaper, and I can't think of ones that are safe to use," Gibson said of the expenditures. "But that's sort of everything that's wrong with there being no oversight with this."
But many Garden State municipalities contend their decisions were evidence-based and state sanctioned.
Atlantic City officials say they relied on evidence-based practices to make all of their opioid settlement spending choices, according to spokesperson Andrew Kramer.
"The city remains committed to using opioid settlement funds in a manner that directly addresses the needs of our community," he told NJ.com in an email. "These expenditures support outreach, engagement, and pathways to treatment for vulnerable populations impacted by substance use and homelessness."
Even the 2022 Ford Mustang Mach-E, emblazoned with a custom wrap promoting the HERO Campaign for Designated Drivers?
"Utilized by the Atlantic City Police Department in support of community outreach and public safety initiatives connected to opioid response efforts," Kramer said.
The 30 monogrammed jackets for the city's Community Engagement Unit?
"Purchased for city employees conducting outdoor community outreach efforts involving vulnerable populations impacted by opioid addiction," Kramer said.
And the homeless workforce program that gives unhoused residents $75 per day to sweep streets among other things?
"These funds supported a workforce initiative designed to assist individuals experiencing homelessness and opioid-related challenges by providing temporary employment opportunities with the city, while also helping connect participants with treatment and recovery services," Kramer said.
The aggressive marketing of OxyContin by Purdue Pharma in 1996 triggered the first wave of the opioid epidemic, experts say. Associated Press
In Camden, the city gave a nonprofit $148,000 to identify broken streetlights so it could fix them. The initiative aimed "to impede the drug trade and prevent open drug use," said city spokesperson Vincent Basara.
Irvington "wasted" more than $600,000 in settlement funds on two awareness concerts in 2023 and 2024, according to a scathing July 2025 report by the Office of the State Comptroller.
"None of the billboards, promotional materials, or T-shirts that Irvington provided to the Office of the State Comptroller included information about obtaining treatment or avoiding abuse of opioids," the report read.
Irvington officials did not respond to requests for comment. In a statement at the time, they said they "adhered to all legal requirements and procedures" in the management of the opioid funds.
The city has since filed a defamation lawsuit against the OSC in state Superior Court. The case was dismissed with prejudice on all but one count. In April, the township filed an amended complaint on its remaining claim.
Meanwhile, Manchester Township spent $57,000 on a car for a school resource officer "to combat drug addiction and overdose related issues (in the) school system." Lindenwold planned to build a game trailer where kids can play video games. Ramsey bought an $8,500 police K9 with settlement funds. Deidre Dillon, the borough's mayor, said it got the green light from the Attorney General's office; the AG's office said it doesn't "provide legal advice" on the use of opioid settlement funds.
In East Hanover, the town spent $3,850 to install frosted windows in a police training room. Chief Christopher Berres said it created "a safe place for both people suffering from OUD (opioid use disorder) and as well as their families looking for help. This provided confidentiality which led to more people being comfortable in coming to Narcan training/distribution."
And in South Jersey, Pennsauken used the funds to pay part-time EMTs an additional $9 per hour to compete with neighboring towns. The pay hikes were an "investment in the Township's first responders," Amy Schmalback, the mayor's liaison, told NJ.com.
"Competitive salaries allow the Township to properly staff by retaining current EMS staff and recruit and hire new staff," Schmalback said in an email. "The additional staff provides better coverage to respond to overdoses and allows for the flexibility to send EMS employees to trainings while still providing adequate staff to respond to emergencies."
"I'm upset that these things are happening, and I'm even more upset that there's no accountability. Is there no accountability built into this process?"
Sandy Gibson, The College of New Jersey
Many towns' expenditures involve crime prevention — not substance use prevention — according to Jamey Lister, a Rutgers University professor who researches evidence-based behavioral health solutions. Instead, the money should fund proven interventions that save lives, he says, such as early detection of psychiatric disorders, access to naloxone and syringe exchange services, and treatment medications like methadone and buprenorphine.
"Those are things that are being referenced so many times because there's ample literature on their value, so they're not up for debate anymore," Lister said.
Much of the misspending is also a relic of the failed war on drugs and isn't evidence based, according to other experts. And it defies the intended purpose of settlement funds — to underwrite prevention, treatment and outreach for those whose lives were shattered by addiction.
States like California, Indiana, Kansas, Michigan, South Carolina and Virginia prohibit spending on items like defibrillators and law enforcement equipment such as K9s and uniforms, according to the Opioid Policy Institute, a group that tracks settlement spending.
But in some New Jersey municipalities, the problem isn't only what they spent the funds on — it's also how and even if they spend them at all.
Towns routinely skip or have delayed for years expert-recommended steps like forming strategic plans, petitioning community input and implementing risk assessments.
In Summit, the city sat on $973,437.62 in settlement funds as of June 2025.
Mayor Elizabeth Fagan said the town did not spend its funds during the 2025 reporting period because it was doing "due diligence on appropriate management of these funds so that our process is compliant with all laws and standards." Since the beginning of 2026, Summit has formed a strategic plan and asked local nonprofits how the funds should be spent, Fagan said.
But critical months went by when no action was taken.
"They're not doing what's intended," Gibson said. "It's just sitting there unspent. You're telling us what your priorities are. Your inaction tells us this is not a priority to you."
John Armato with a photo of his late son Derek at his home in Buena Vista. Derek Armato battled opioid addiction for decades before his death. He left behind a wife and two children. Joe Warner | For NJ.com
John Armato didn't want to go public. He wishes he didn't have to.
The former town committeeman and state assemblyman believed in the system. And he thought he could convince New Jersey officials to do the right thing.
So the Air Force veteran and retired HVAC worker filed public records requests, targeting Atlantic City's settlement spending. Armed with the documents, he approached the comptroller's office.
He says it eventually went silent on him. The OSC told NJ.com it is "unable to confirm or deny the existence of any investigation, review, or referral."
Armato then reached out to six former colleagues in the Legislature.
"I thought, 'I know these people,'" he said. "And they did absolutely nothing. Literally, nothing."
Even some government officials agree that state agencies are ducking responsibility and passing the buck.
The Department of Human Services says it can't intervene in how settlement money is spent. The Attorney General's office says that's the responsibility of Human Services. The state comptroller says the Treasury and the Department of Community Affairs need to police the misspending, especially egregious offenders. But Community Affairs says it does not have authority to take many of the steps the OSC recommended.
Yet without oversight, "local governments will be ill-equipped to spend opioid funds responsibly, and some will continue to spend the funds improperly," the comptroller's office warned in its 2025 report.
The overlap in responsibilities doesn't help.
The stream of funding flowing into municipalities is monitored by DHS. But the state comptroller and the Attorney General's office are tasked with ensuring municipalities abide by the terms of the settlement agreement and the 2023 Opioid Law. The legislation also created the Opioid Recovery and Remediation Fund Advisory Council to provide guidance on spending the funds.
"When (John Armato) told me what these funds were being spent on, I was pissed off."
Want to see how your town spent opioid funds in 2025? Search the table below.
Another complication is the vague language in the settlement agreement and the law itself. They give municipalities generous flexibility in how they spend the funds. They can't use the money to plug budget gaps — to avoid what happened with the tobacco industry settlement funds. Instead, towns are tasked with applying the money to treat opioid use disorder, provide harm reduction services and prevent overdose deaths, according to the national opioid settlement agreement, the opioid law and a state Attorney General's memo.
Last year, the OSC challenged the passivity of the DHS and lawmakers after investigating Irvington's use of the funds, finding money had been "misspent" in 2023 and 2024.
The comptroller's office said DHS has the expertise to help municipalities properly use the proceeds — even if it claims otherwise. Simply collecting self-reported data on how towns spend the money isn't enough, the comptroller's office chided the agency.
But when NJ.com approached DHS, it doubled down that it isn't responsible and can't intervene.
"Local governments bear ultimate responsibility for ensuring appropriate use of funds," Tom Hester, a DHS spokesperson, told NJ.com in an email. "Human Services has provided general recommendations and guidance and will continue to do so."
In the meantime, others are trying to fill the vacuum.
Louis Cappelli Jr., director of the Camden County Board of Commissioners, noticed the same pattern — municipalities misspending or not spending settlement funds at all.
Most simply don't know how to use the money, he says. The numbers back him up: Only half the cities engaged the public about the funds and just a fraction completed risk assessments or strategic plans.
Camden County said it planned to reach out to its municipalities to see if it can identify the best ways to apply the funds — unlike buying K9s.
"Frankly, I'm not sure how buying a dog in any way meets the criteria or the intent of how these funds should be used," Cappelli said.
The mantle in John Armato's home in Buena Vista is dedicated to his late son Derek. Joe Warner | For NJ.com
In 2022, the man with kind brown eyes and a tapered, horseshoe mustache lost his seat in the Assembly, where the Democrat had focused his efforts on the opioid epidemic and veterans' issues.
He retired, but he wasn't done fighting.
He replaced his anger over Derek's death by concentrating on helping those addicted. Armato was already a member of support groups and a certified recovery coach for codependents, helping other families navigate what he experienced. He now volunteers with substance abuse organizations across Atlantic County.
He won't allow Derek's death to be in vain. But he knows it won't be easy.
Containers depicting OxyContin pill bottles lie on the ground in front of the Department of Health and Human Services' headquarters in Washington as protesters demonstrate against the FDA's opioid prescription drug approval practices. Associated Press
The settlement funds are "not taxpayer money. It's not state money. It's not federal money. It's not county money. It's not municipality money," said Armato, who lives in the same two-story home in Buena Vista where he and his wife, Marie, raised Derek and his sister, Lauren. "There is no advantage for a political person to jump on this bandwagon because they can't say to the constituents, 'Look how much money I saved you by uncovering this' because they're not saving them anything."
But finally, it seems, someone is listening.
Assemblyman Cody Miller, D-Gloucester, plans to draft legislation to regulate use of the funds, he says, spurred by Armato reaching out to him. The bill will call for tighter oversight and transparency.
"I'm happy that this story is coming out. I think municipalities can learn from it. I think the state can learn from it, and I think it can help us make sure that we're doing things more appropriately and that funds are being spent for their intended purpose…" Miller said. "When (Armato) initially told me what these funds were being spent on, I was pissed off."
"There's so much ambiguity with the settlement information … that it's open to interpretation," added Miller, whose older sister and brother have struggled with addiction.
"I can't think of (words) that are safe to use in a newspaper. But that's sort of everything that's wrong with there being no oversight with this."
Sandy Gibson, The College of New Jersey
Miller has introduced opioid fund legislation before. In May, he introduced a controversial bill that would allocate settlement monies to the New Jersey State Police's Operation Rise. This drew protest from advocates who saw it as a police "carveout."
Armato still hopes the remaining money will aid those who need it most. When he thinks about the squandered funds, he thinks about Derek.
Armato prefers to remember his son as the man in the photo now sitting on his fireplace mantle beside Derek's urn. In the photo, Derek wears a worn baseball cap, riffing on an electric guitar with his eyes closed, lost in the music.
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Armato worries about other people's sons and daughters, and he's concerned that no one will step in and police settlement fund spending "because there's no penalty" for municipalities, he said.
"If nobody's looking at it today, if people get comfortable using it incorrectly today, where does it stop?"
Derek Armato's urn, sitting on his parents' living room mantle. Joe Warner | For NJ.com
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