Georgia Tech Procurement Assistance Center

  • Home
  • About Us
  • Training
    • Class Registration
    • On-demand Training
    • GTPAC COVID-19 Resource Page
    • Veterans Verification Video
    • Other Training Audio & Video
  • Useful Links
  • Team Directory
    • Albany Counselor
    • Atlanta Counselors
    • Augusta Counselor
    • Carrollton Counselor
    • Columbus Counselor
    • Gainesville Counselor
    • Savannah Counselor
    • Warner Robins Counselor
  • Directions
    • Atlanta – Training Facility
    • Atlanta – Office
    • Albany
    • Augusta
    • Carrollton
    • Columbus
    • Gainesville
    • Savannah
    • Warner Robins
  • COVID-19
  • New Client Application
  • Contact Us

Multiple defendants charged with 22 counts of fraud and money laundering involving $200 million in small business contracts

April 5, 2018 By Andrew Smith

A federal grand jury returned a twenty-two count indictment on April 3rd, charging three defendants with a 12-year fraud and money laundering scheme involving over $200 million in government-funded contracts intended to benefit small businesses.

The indictment names two individuals, Brian L. Ganos and Mark F. Spindler, both of Wisconsin, and the business Sonag Company, Inc. as defendants.  In a related case, Nicholas Rivecca, Sr., also of Wisconsin, agreed to plead guilty to conspiring to defraud the United States.

The indicted defendants are charged with a conspiracy to commit mail fraud and wire fraud.  The alleged conspiracy involves 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 conspirators then fraudulently obtained small business program certifications to win government-funded contracts to which they were not entitled.

Specifically, court documents allege the following:

  • Nuvo Construction Company, Inc., was misrepresented in order to obtain certifications as a Small Disadvantaged Business from the U.S. Small Business Administration (SBA) and as a Disadvantaged Business Enterprise (DBE) from Milwaukee County.  However, the disadvantaged owner 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 another individual to obtain verification as a Service-Disabled Veteran-Owned Small Business.  In reality, for long stretches, the “owner” had virtually no involvement in C3T.
  • Pagasa Construction Company, Inc. was misrepresented to be majority owned and controlled by a third disadvantaged individual in order to obtain certification as a Small Disadvantaged Business from the SBA.  In reality, the owner relied on the assistance of conspirators to form Pagasa.

The federal indictment alleges that the defendants used their certifications to obtain over $200 million in federal, state, and local contract payments.  These included federal construction contracts that were set aside for Small Disadvantaged Businesses or Service-Disabled Veteran-Owned Small Businesses.  The indictment also alleges that the scheme included using Nuvo’s DBE certification to win ready-mix concrete contracts based on the false representation that Nuvo provided ready-mix concrete independently when, in truth, Nuvo’s concrete operations depended heavily on Sonag Ready Mix.  As a part owner of Sonag Ready Mix, Nicholas Rivecca, Sr. agreed to plead guilty to that portion of the scheme.

The government alleges that the conspirators engaged in efforts to conceal the scheme and obstruct investigations into the matter; when interviewed, Ganos and Spindler each gave materially false statements to federal agents.

The indictment also alleges that Ganos conspired with Sonag Company, Inc. and others to launder proceeds of the fraud scheme in order to disguise and conceal the nature, source, and location of those fraud proceeds.  As a part of that conspiracy, Ganos is alleged to have transferred fraud proceeds from accounts of Nuvo and C3T to accounts that Ganos controlled.  The indictment further charged Ganos with three counts of concealment money laundering transactions, one of which involved the purchase of a Corvette with proceeds of the fraud scheme, and seven counts of spending money laundering transactions.

The maximum penalties for each of the wire and mail fraud-related charges are 20 years in prison, a $250,000 fine, and forfeiture of criminal proceeds.  The maximum term of imprisonment for conspiring to defraud the United States is five years.  The maximum term of imprisonment for the money laundering conspiracy and for each of the three concealment money laundering charges is 20 years in prison.  The maximum term of imprisonment for each of the seven spending laundering charges is 10 years in prison.  Each of the 11 money laundering charge also carries a fine of up to $250,000 or twice the amount laundered and subjects the defendant to forfeiture of all money and property involved in the laundering transaction.

Assets of the defendants — including real property, a 2014 Chevrolet Corvette Stingray Convertible, and more than $2.2 million seized from two bank accounts — are subject to civil forfeiture actions filed by the federal government.

The following agencies are participating in this investigation: 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 the U.S. Army Criminal Investigations Command Major Procurement Fraud Unit.

An indictment is only a charge and not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.

Source: https://www.justice.gov/usao-edwi/pr/multiple-defandants-charged-fraud-and-money-laundering-scheme-involving-over-200

Filed Under: Contracting News Tagged With: abuse, construction, DBE, DCAA, DOJ, false statement, FBI, fraud, GSA, IG, indictment, mail fraud, money laundering, OIG, SBA, SDVOSB, small business, USDOT, VA, wire fraud

Supply company owner pleads guilty to $1 million fraud scheme

March 24, 2017 By Andrew Smith

The owner of three fraudulent commercial supply companies has pled guilty to cheating approximately 40 subcontractors out of more than $1 million.

From February 2010 through August 2015, Keith B. Fisher Sr. of Philadelphia used FedBid.com to submit quotes and offers for his companies KLA International Inc., Quad Trade Services Inc. and TCI Technologies. After winning federal contracts, Fisher and his associates would subcontract third-party vendors to provide goods to government agencies with the intention to not pay or only pay nominal amounts to the 40 victim vendors.

Keep reading this article at: http://www.federaltimes.com/http:/www.federaltimes.com/articles/supply-company-owner-pleads-guilty-to-1m-fraud-scheme

Filed Under: Contracting News Tagged With: FedBid, fraud, mail fraud, reverse auction, subcontracting, supplier relationships

Jury convicts contractor of defrauding city’s womens business program

June 21, 2016 By Andrew Smith

FBI SealA federal jury on Friday (June 17, 2016) convicted a suburban Chicago construction subcontracting firm on fraud charges for scheming to help a general contractor falsely satisfy the woman’s business enterprise (WBE) requirement on city of Chicago construction projects.

As the owner of the WBE, Elizabeth Perino agreed to allow her company to be claimed as a subcontractor on city projects so that the prime contractor could satisfy its requirement to assign a portion of the work to female-owned businesses.  Perino falsified paperwork to conceal the fact that her business, Perdel Contracting Co., would perform no actual work on the projects.  As a result of Perino’s fraud, Perdel expected to receive payment equivalent to a percentage of the work that Perdel Contracting fraudulently claimed to have performed.

Perino, 62, was convicted on three counts of wire fraud and one count of mail fraud.  The conviction is punishable by a maximum sentence of 80 years in prison.  U.S. District Judge Gary Feinerman indicated he will schedule a sentencing hearing at a later date.

Background

A city of Chicago ordinance establishes an overall goal of awarding at least 5% of total annual funding of all city contracts to WBEs.  The city’s program mirrors the federal government’s WOSB, or women-owned small-business, contracting program.  For contracts with values exceeding $10,000, each contractor has to commit a certain percentage of labor to WBEs, either as a joint venture or subcontractor, or by purchasing goods or services from a WBE.  In addition to being a WBE, the Perdel firm, which specializes in concrete and carpentry work, also qualified to participate in city projects as a certified Disadvantaged Business Enterprise (DBE).  The DBE program is a requirement by the U.S. Dept. of Transportation, applicable to federally-assisted transportation projects like airports, highways, and public transit systems.

Facts

Evidence at the four-day trial revealed:

  • Perino and a co-worker agreed to act as a “pass-through” WBE/DBE on two city projects, meaning that Perdel’s employees would perform no work and Perdel’s equipment would not be used.
  • For one of the projects – at O’Hare International Airport – Perino agreed to place the general contractor’s employees on Perdel’s payroll to perform the work that would be credited to Perdel.
  • Perino also entered into a sham contract to “purchase” street sweepers from the general contractor and title them in Perdel’s name while the general contractor’s workers performed the street sweeping as purported employees of Perdel.  Perino and the general contractor further agreed that, at the conclusion of the O’Hare project, the street sweepers would be returned to the general contractor for $1 per machine, and Perdel would receive 18% on top of the labor costs and $20 per hour for the street sweepers.

The conviction was announced by the U.S. Attorney for the Northern District of Illinois, along with representatives of the Federal Bureau of Investigation, and the Inspector General’s offices of the U.S. Dept. of Transportation, the U.S. Dept. of Labor, and the City of Chicago.

Source: https://www.justice.gov/usao-ndil/pr/jury-convicts-lockport-contractor-defrauding-city-chicago-s-women-owned-business-entity

See the FBI’s 2012 announcement of the charges filed against Perino at: https://www.fbi.gov/chicago/press-releases/2012/two-area-contractors-charged-with-fraud-involving-minority-and-women-set-asides-for-government-construction-contracts

Filed Under: Contracting News Tagged With: conviction, DOJ, DOL, fraud, front, Justice Dept., Labor Dept., mail fraud, sham, USDOT, WBE, wire fraud, wosb

Recent Posts

  • OMB releases guidance related to small business goals
  • Are verbal agreements good enough for government contractors?
  • OMB issues guidance on impact of injunction on government contractor vaccine mandate
  • CMMC 2.0 simplifies requirements but raises risks for government contractors
  • OFCCP launches contractor portal initiating AAP verification program

Popular Topics

8(a) abuse Army bid protest budget budget cuts certification construction contract awards contracting opportunities cybersecurity DoD DOJ False Claims Act FAR federal contracting federal contracts fraud GAO Georgia Tech government contracting government contract training government trends GSA GSA Schedule GTPAC HUBZone innovation IT Justice Dept. marketing NDAA OMB SBA SDVOSB set-aside small business small business goals spending subcontracting technology VA veteran owned business VOSB wosb

Contracting News

OMB releases guidance related to small business goals

OMB issues guidance on impact of injunction on government contractor vaccine mandate

Changes coming to DOD’s Cybersecurity Maturity Model Certification under CMMC 2.0

Judge issues nationwide injunction halting enforcement of COVID-19 vaccine mandate

Nondisplacement of qualified workers is back, but with changes

Read More

Contracting Tips

Are verbal agreements good enough for government contractors?

CMMC 2.0 simplifies requirements but raises risks for government contractors

OFCCP launches contractor portal initiating AAP verification program

GAO rules that DoD may not require small business Joint Venture itself hold facility security clearance

Terminations for convenience clauses vs. mutual termination clauses

Read More

GTPAC News

VA direct access program events in 2022

Sandia National Laboratories seeks small business suppliers

Navy OSBP hosting DCAA overview (part 2) event Jan. 12, 2022

Navy OSBP hosting cybersecurity “ask me anything” event Dec. 16th

State of Georgia hosting supplier systems training on January 26, 2022

Read More

Georgia Tech News

Undergraduate enrollment growth reflects inclusive excellence

Georgia Tech delivers $4 billion in economic impact to the State of Georgia

Georgia Tech awards first round of seed grants to support team-based research

Georgia Tech announces inaugural Associate Vice President of Corporate Engagement

DoD funds Georgia Tech to enhance U.S. hypersonics capabilities

Read More

  • SAM.gov registration is free, and help with SAM is free, too
APTAC RSS Twitter GTPAC - 30th Year of Service

Copyright © 2022 · Georgia Tech - Enterprise Innovation Institute