Investigations

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Chicago Engineering Contractor Sentenced to 41 Months in Prison and $10.5 million in Restitution for Overbilling DOT-Funded Contracts

On June 30, Manu Shah, owner of Shah Engineering, Inc. (SEI), was sentenced in U.S. District Court, Springfield, Illinois, to 41 months in prison and ordered to pay $10 million in restitution. Shah Engineering, Inc. was also sentenced to 2 years of probation and fined $500,000. On February 1, 2007, Mr. Shah pled guilty to two counts of mail fraud and one count of false statements. SEI agreed to plead to one count of mail fraud. This case was opened upon referral from the Illinois Department of Transportation (IDOT). IDOT conducted an audit of SEI and determined that SEI overstated their overhead expenses for IDOT contracts, for City of Chicago contracts, and for Illinois State Toll Highway Authority contracts. The investigation and further audit revealed overbilling of approximately $2.2 million in Federal Transit Administration (FTA) funds, $2.6 million in Federal Highway Administration funds, and approximately $448,000 in Federal Aviation Administration funding. Mr. Shah was the primary contractor or subcontractor on various projects for engineering and architectural services for IDOT and other state governmental agencies from 1997 to 2005. IDOT issued SEI a Notice of Suspension on August 15, 2005. Referral to the FTA for debarment action is pending.