Massachusetts Construction Company and Owner Sentenced for Theft and False Statements
On November 7, 2013, in U.S. District Court, Boston, Massachusetts, Juan J. Alonso and his business, Aguila Construction Company, were sentenced for the theft of benefit plans, making false statements in documents submitted to benefit plans, and making false statements to the U.S. Department of Transportation. Alonso was sentenced to 13 months incarceration, 36 months supervised release, and the company received 5 years probation. Both Alonso and his company were ordered to pay $782,824 in restitution and forfeit $752,520.
Between 2008 and 2011, Alonso operated Aguila Construction Company, Inc. and Alonso Construction, Inc. from the same location in Fitchburg, Massachusetts. The companies performed the same type of work, used the same equipment, and used the same laborers and office staff. This "double-breasted" arrangement is often used in the construction industry to avoid paying union members the union wages and benefits.
Alonso defrauded the benefit funds by running part of the Aguila Construction payroll through his non-union company, Alonso Construction, thereby underreporting the hours actually worked by Local 39 union members. Alonso also defrauded the funds by paying Aguila Construction laborers in cash, in order to avoid making hourly payments to the benefit funds. Over the four-year period, Alonso failed to pay the benefits fund by approximately $805,338.
During the scheme, Alonso secured several publicly-funded projects, including 12 projects funded by the DOT pursuant to the American Recovery and Reinvestment Act of 2009 (ARRA). As part of the scheme, a portion of this contract work was conducted by Alonso Construction rather than Aguila Construction, the signatory to the contracts. In particular, between June 2009 and May 2010, Aguila Construction was subcontracted to perform construction work on an ARRA-funded construction project on Route 2 in Harvard and Littleton. In connection with this project, Aguila Construction completed and sent to the Massachusetts Department of Transportation certified payroll records falsely stating the identity of employees, the number of hours worked and the wages paid.
We conducted this investigation jointly with the U.S. Department of Labor (DOL), Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; and the U.S. DOL, Employee Benefits Security Administration.