Last week in Wisconsin, three defendants agreed to plead guilty to federal crimes related to a long-term fraud scheme led by Brian L. Ganos involving government-funded contracts intended to benefit small businesses.
The three defendants are James E. Hubbell of Sussex, WI, Jorge Lopez of Worthington, Minnesota, and Telemachos Agoudemos of Big Bend, WI.
According to the charges, the scheme involved Ganos, Hubbell, and others operating construction companies with straw owners who qualified as a disadvantaged individual or as a service-disabled veteran, but who did not actually control the companies. The scheme participants fraudulently obtained small business program certifications to win millions of dollars in government-funded contracts to which they were not entitled. Specifically, the following is alleged:
- Nuvo Construction Company, Inc. (Nuvo”) was misrepresented to be majority-owned and controlled by Lopez to obtain certifications as a Small Disadvantaged Business from the U.S. Small Business Administration and as a Disadvantaged Business Enterprise from Milwaukee County. In reality, Lopez worked full-time for a different entity in Minnesota and did not actually control Nuvo.
- C3T, Inc. was misrepresented to be majority owned and controlled by Agoudemos to obtain verification as a Service-Disabled Veteran-Owned Small Business. In reality, for long stretches, Agoudemos had virtually no involvement in C3T.
Hubbell and Lopez agreed to plead guilty to conspiring to defraud the United States by virtue of the scheme in violation of 18 U.S.C. § 371. Agoudemos agreed to plead guilty to making false statements to federal agents in order to conceal that C3T, Inc. did not qualify as a Service-Disabled Veteran-Owned Small Business in violation of 18 U.S.C. § 1001. The maximum penalties for these offenses is five years in prison and a $250,000 fine.
Earlier this month, on April 3, 2018, charges were filed against four defendants in two cases that are related to the April 18 charges. (See: http://gtpac.org/?p=14290.)
- First, in Case No. 18-CR-62, an indictment was filed charging Brian L. Ganos of Muskego and Mark F. Spindler of Menomonee Falls, and the business Sonag Company, Inc. with crimes related to the fraud scheme. The indictment also alleged that Ganos engaged in money laundering with proceeds from the scheme. The indictment included a forfeiture notice indicating that the United States seeks to forfeit a condominium located in Winter Park, Colorado; the office building used by the companies at 5500-5510 West Florist Avenue, Milwaukee, Wisconsin; a 2014 Chevrolet Corvette Stingray Convertible; and more than $2.2 million seized from two bank accounts. Each of those assets is subject to civil forfeiture actions filed by the United States.
- Second, in Case No. 18-CR-64, Nicholas Rivecca agreed to plead guilty to an Information charging him with conspiring with Ganos and others to use Nuvo’s DBE status to win government-funded concrete orders. Rivecca and Ganos were the co-owners of Sonag Ready Mix, LLC, which is alleged to have filled the concrete orders in Nuvo’s name.
The following agencies are participating in the investigation that led to these charges: the Federal Bureau of Investigation; U.S. General Services Administration, Office of Inspector General; Department of Veterans Affairs, Office of Inspector General; Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service; U.S. Department of Transportation, Office of Inspector General; U.S. Small Business Administration, Office of Inspector General, Investigations Division; Defense Contract Audit Agency; and U.S. Army Criminal Investigations Command Major Procurement Fraud Unit.