http://www.oig.dot.gov/rss.jsp?subject=36 The 10 most recent releases on the U.S. DoT OIG web site related to Contract & Grant Fraud en-US webmaster@oig.dot.gov (OIG Webmaster) http://www.oig.dot.gov/images/dot.gif http://www.oig.dot.gov/rss.jsp?subject=36 http://www.oig.dot.gov/item.jsp?id=2567 Benton J. Campbell, United States Attorney for the Eastern District of New York, today announced the settlement of claims that Tutor Perini Corporation, formerly Perini Corporation (“Perini”), a publiclytraded construction services corporation, falsely and fraudulently reported that certain minority and disadvantaged business enterprises (“DBEs”) were performing subcontracted work on federally funded public works contracts with the City and State of New York, when in fact nonDBE subcontractors were performing the work. Pursuant to the settlement, Perini has paid the United States $9,750,000. The settlement does not constitute an admission of liability by Perini.The settlement announced today is the result of a joint investigation conducted by the Federal Construction Fraud Task Force, which was organized by the United States Attorneys Office in June 1999 to investigate fraud and corruption in the construction industry. In addition to the U.S. Attorneys Office, the members of the Task Force include the Internal Revenue Service, Criminal Investigation Division; the USDOT Office of the Inspector General; the U.S. Department of Labor Office of the Inspector General; the New York City Department of Investigation; the Inspector General for the Metropolitan Transportation Authority; and the Inspector General for the Port Authority of New York and New Jersey.For further information, please see the press release of the U.S. Attorneys Office, Eastern District of New York. Thu, 05 Nov 2009 00:00:00 GMT http://www.oig.dot.gov/item.jsp?id=2567 http://www.oig.dot.gov/item.jsp?id=2552 On October 9, 2009, Michael Spinelli, a former Con Edison utility company inspector, was sentenced in U.S. District Court, Brooklyn, New York, to serve three years probation and ordered to pay a $100 special assessment for his role in accepting bribes from general contractors on New York area roadway reconstruction projects. Mr. Spinelli previously pled guilty and admitted that from 1970 to 2001, he conspired with others to accept bribes on numerous roadway reconstruction projects awarded by DOT grantees throughout the New York area and did not declare these bribes as income on his Federal tax returns. In exchange for the bribes, Mr. Spinelli and others expedited payments to the general contractors for the cost of the additional work they performed to avoid utilities on the roadway projects. On December 5, 2008, other defendants in this case, Andrew Catapano, President of AFC Enterprises, Incorporated, and John Mikuszewski, Consultant to Rosewood Contracting Corporation, pled guilty midway through their trial to charges of conspiracy and admitted that they conspired to bribe union officials and utility company representatives on numerous roadway reconstruction projects awarded by DOT grantees throughout the New York area from 1998 to 2001. They were subsequently sentenced to terms of incarceration and ordered to forfeit $1.2 million to the government. Fri, 09 Oct 2009 00:00:00 GMT http://www.oig.dot.gov/item.jsp?id=2552 http://www.oig.dot.gov/item.jsp?id=2532 On August 28, Luis D. Ruiz, former hazardous materials handler at Bombardier Aerospace (Bombardier), Des Plaines, Illinois, pled guilty in U.S. District Court, Peoria, Illinois, to one count of conspiracy to commit mail fraud. Mr. Ruiz was previously indicted on charges of conspiracy and mail fraud for a scheme to steal an estimated $1.3 million worth of aerospace parts from Bombardier between October 2006 and November 2008. Bombardier operates a warehouse logistics facility in Des Plaines, Illinois, which stores spare parts. According to the indictment, Mr. Ruiz sold stolen commercial aviation parts, including altimeters and microphones, on eBay, an Internet auction site. During the investigation, our special agents and U.S. postal inspectors executed Federal search warrants at Mr. Ruizs two residences in the Chicago, Illinois, area and numerous stolen Bombardier parts were recovered. Mr. Ruiz is expected to be sentenced on December 3, 2009. Fri, 28 Aug 2009 00:00:00 GMT http://www.oig.dot.gov/item.jsp?id=2532 http://www.oig.dot.gov/item.jsp?id=2531 On August 25, the U.S. District Court of Harrisburg, Pennsylvania, unsealed a fortycount indictment charging Rubik Avetyan, and his two sons, Allen and Alfred, with multiple counts of mail fraud, wire fraud, aggravated identity theft, and conspiracy. Mr. Avetyan and his sons created two shell companies and provided false identity information to the Federal Motor Carrier Safety Administration (FMSCA). The Avetyans used the shell companies to facilitate a doublebrokerage scheme and transport stolen merchandise. They received approximately $1,060,000 in illicit payments and goods. The indictment alleged that the Avetyans utilized various motor carrier broker websites to procure loads for transport with unsuspecting businesses. The Avetyans entered into agreements with legitimate brokers which falsely indicated that their shell companies would haul and broker the load. They then brokered the load to a legitimate carrier and agreed to compensate the legitimate carrier at a higher rate. The Avetyans obtained payments from the brokerage firm that listed the load, but failed to pay the carrier that actually delivered the load. Tue, 25 Aug 2009 00:00:00 GMT http://www.oig.dot.gov/item.jsp?id=2531 http://www.oig.dot.gov/item.jsp?id=2528 On August 24, a federal grand jury in Greenbelt, Maryland, indicted Rodney Mathis, a former contractor with the DOT Office of the Senior Procurement Executive; Dejuan Fountain, a U.S. Army warrant officer, and Rafael Simmons on charges that they defrauded several companies in a scheme involving multimillion dollar contracts. The indictment seeks forfeiture of over $4 million and two vehicles in connection with the fraud scheme. The victim companies are finance companies that purchase accounts receivable from government contractors. From November 2007 to July 2009, the defendants allegedly obtained over $4 million from the finance companies by falsely representing that business entities associated with Mr. Simmons had obtained legitimate multimillion dollar government contracts. In furtherance of the scheme, Mr. Mathis falsely represented himself as the contracting officer for the U.S. Army, and through a series of emails and phone calls using his DOT computer, convinced the finance companies that a genuine government contract existed. Mr. Fountain represented himself as a financial officer for the Army and as a secretary and CEO of a business entity associated with Simmons. Mr. Simmons and Mr. Mathis caused partial payments to be made to the finance companies from bank accounts controlled by the defendants, and made such payments appear as if they were from the government, thereby deceiving them into believing that legitimate government contracts existed. Mr. Fountain and Mr. Mathis then used Army email addresses to falsely represent that government payments on the “government contract” were delayed or misdirected. This OIG investigation is being conducted jointly with the FBI, IRS Criminal Investigative Division and the DCIS.Note: As in any criminal case, a person is presumed innocent unless and until proven guilty. The charges filed merely contain allegations of criminal conduct. Mon, 24 Aug 2009 00:00:00 GMT http://www.oig.dot.gov/item.jsp?id=2528 http://www.oig.dot.gov/item.jsp?id=2521 On August 3, Robert Prosperi of Lynnfield, Massachusetts, Gregory A. Stevenson of Furlong, Pennsylvania, John J. Farrar of Canterbury, Connecticut, and Marc Blais of Lynn, Massachusetts, were convicted of conspiracy and fraud charges following a three week trial in U.S. District Court, Boston, Massachusetts. Mr. Prosperi and Mr. Stevenson were convicted of conspiracy to commit highway project fraud and mail fraud, conspiracy to defraud the government with respect to claims and making false statements in connection with highway projects and mail fraud. Mr. Farrar was convicted of conspiracy to commit highway project fraud and mail fraud, and making false statements in connection with highway projects and mail fraud. Mr. Blais was convicted of making false statements in connection with highway projects and mail fraud. On July 8, 2009, Gerard M. McNally of Rockland, Massachusetts, and Keith Thomas, of Billerica, Massachusetts, each pled guilty to five counts of fraud on a federal highway project, five counts of mail fraud, one count of conspiracy to commit mail fraud, and one count of conspiracy to submit false claims. All six individuals, who were in managerial positions in the Aggregate Industries (AI) concrete division, were convicted of fraud and related offenses for engaging in a scheme to provide approximately 5,000 truckloads of concrete that did not meet specifications to Big Dig contracts between 1996 and 2005. Sentencing is scheduled for November. The investigation was conducted by DOT/OIG, the Massachusetts State Police, and the Federal Bureau of Investigation and prosecuted by the U.S. Attorneys Office for the District of Massachusetts with assistance from the Massachusetts Office of the Attorney General. Mon, 03 Aug 2009 00:00:00 GMT http://www.oig.dot.gov/item.jsp?id=2521 http://www.oig.dot.gov/item.jsp?id=2524 On July 31, Aaron Misulovin, the former operator of Kings Motor Oils (Kings), was sentenced in U.S. District Court, Camden, New Jersey, to 43 months incarceration and $ 1 million restitution for crimes related to the evasion of motor fuel excise taxes. Mr. Misulovin was indicted on motor fuel tax evasion charges in 1995, but fled prior to prosecution. On February 27, 2009, after being a fugitive for 13 years, he pled guilty to numerous criminal charges. The 1995 indictment charged Mr. Misulovin and twentyfour (24) other defendants with approximately $138 million in evaded federal and New Jersey state motor fuel excise taxes. The federal motor fuel taxes fund the Department of Transportations Highway Trust Fund. In addition, the indictment charged each individual, including Mr. Misulovin, with substantive offenses of wire fraud, money laundering, and tax evasion. Mr. Misulovin operated Kings, a wholesale fuel distributorship. According to the indictment, Kings purchased hundreds of millions of gallons of taxfree home heating oil, but through an elaborate scheme the fuel was resold by a wholesaler as diesel fuel for highway use, with Federal and state taxes being charged and collected from unknowing customers. Instead of remitting payment to the IRS and the state, the taxes were distributed among Misulovin and other conspirators. Mr. Misulovin and the other tax evaders insulated themselves by creating “shell companies” and made it appear as though these sham entities bought and sold the fuel. In reality, these companies never took title or possession of the fuel and Mr. Misulovin created false invoices and other documents to disguise the transactions between wholesale fuel distributorship and fuel wholesaler. Fri, 31 Jul 2009 00:00:00 GMT http://www.oig.dot.gov/item.jsp?id=2524 http://www.oig.dot.gov/item.jsp?id=2512 On Tuesday, July 14, 2009, Andrew Catapano, the President of AFC Enterprises, Incorporated, and John Mikuszewski, a consultant to Rosewood Contracting Corporation, were sentenced in U.S. District Court, Brooklyn, New York, for their roles in an elaborate bribery scheme. Mr. Catapano was sentenced to 10 months in jail to be followed by two years of supervised release and 200 hours of community service. In addition, he was ordered to pay a fine of $25,000 and restitution to the IRS in the amount of $60,000. Mr. Mikuszewski was sentenced to serve 5 months in jail to be followed by 5 months of home confinement and two years of supervised release. In addition, he was ordered to pay a fine of $25,000, and restitution to the IRS in the amount of $139,880, which represents back taxes. Prior to sentencing, the defendants paid a forfeiture of $1.2 million to the United States.On December 5, 2008, Mr. Catapano and Mr. Mikuszewski pled guilty to charges of conspiracy to defraud the United States. Both admitted they conspired to bribe union officials and utility company representatives on numerous roadway reconstruction projects awarded by DOT grantees throughout the New York area from 1998 to 2001. FHWA has suspended Mr. Catapano and Mr. Mikuszewski and is considering debarment as a result of their conviction. Tue, 14 Jul 2009 00:00:00 GMT http://www.oig.dot.gov/item.jsp?id=2512 http://www.oig.dot.gov/item.jsp?id=2514 On July 10, 2009, the Federal Aviation Administration (FAA) ordered the emergency revocation of Peter Sassons airman maintenance certificate. Sasson, an FAA certified mechanic, admitted to OIG agents that between approximately July to October 2008, while a student at the Pittsburgh Institute of Aeronautics (PIA) of West Mifflin, PA, Sasson systematically breached the schools computer database and falsified grades and FAA regulated attendance records. Sassons deceptive actions allowed him to fraudulently receive a graduation diploma from PIA, which in turn provided Sasson a prerequisite to test for an FAA regulated Airman Certificate. Sasson also fraudulently inflated his grades to the degree that he was named the class valedictorian.On April 27, 2009, PIA revoked Sassons Associate Degree in Aviation Maintenance Technology (AMT), repealed his completion certificate in the FAAapproved AMT program, and nullified Sassons status as valedictorian of his graduating class. Fri, 10 Jul 2009 00:00:00 GMT http://www.oig.dot.gov/item.jsp?id=2514 http://www.oig.dot.gov/item.jsp?id=2502 On July 7, Joseph Singh, the Director of Charters of a luxury charter jet company that operated a flight from Teterboro Airport, New Jersey, which crashed on takeoff in 2005 pled guilty in U.S. District Court, Newark, New Jersey, to conspiracy to defraud charter customers and brokers and to impede and obstruct the Federal Aviation Administration. During the plea hearing, Mr. Singh admitted that as the “Director of Charters” for Platinum Jet Management he dispatched unqualified or unrested pilots, including the pilot of the jet that crashed at Teterboro on Feb. 2, 2005, to fly charter customers for the company which was based in Fort Lauderdale, Florida. He further admitted that that from November 2003 until shortly after the Teterboro crash he booked charter flights for Platinum Jet Management using charter brokers and dispatched Platinum Jet pilots to fly those flights. According to Mr. Singh, he dispatched John Kimberling, who was not commercially qualified, to fly the illfated flight from Teterboro to Chicago. The plane crashed into a warehouse after failing to lift off. Mr. Singh admitted that he knew Mr. Kimberling was not qualified to fly that flight, and he further admitted to dispatching Mr. Kimberling on other flights. Tue, 07 Jul 2009 00:00:00 GMT http://www.oig.dot.gov/item.jsp?id=2502