New York Truck Broker Sentenced to Jail and ordered to pay $97,321 for DBE Fraud Scheme
On October 19, 2011, Brian Hotton, owner of BCM Industries, Inc. (BCM), was sentenced in U.S. District Court, Central Islip, New York, for his role in a $3.1 million Disadvantaged Business Enterprise (DBE) fraud scheme. Hotton was sentenced to serve six months in jail, to be followed by three years supervised release; pay a $200 special assessment and restitution to the IRS in the amount of $97,321 for unpaid taxes, interest and penalties.
Mr. Hotton previously admitted that between 1998 and 2001, BCM obtained a trucking subcontract with a DBE subcontract value of $3,150,000, while posing as a DBE known as VVSS Co. Inc. This occurred on a Federal Highway Administration funded project on the Westside Highway in NYC. Mr. Hotton conspired with Vijay Havaldar, the owner of VVSS, to create fraudulent documents in order to generate the false appearance that VVSS was performing the DBE trucking subcontract.
The investigation was conducted by the Federal Construction Fraud Task Force for the Eastern District of New York, whose members include the DOT-OIG; the Internal Revenue Service, Criminal Investigation Division; the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; and the New York City Department of Investigation.