New York Construction Company Owners Sentenced to More Than 1 Year in Prison and Fined for DBE Fraud Scheme
On March 13, Dorothy and Michael Loguidice of Island Park, New York–the owners of Andrea Doreen Construction Inc. (ADC) and JCS Construction, respectively–were sentenced in U.S. District Court, Central Islip, New York. Each defendant was sentenced to serve 15 months in prison, to be followed by 3 years of supervised release, and ordered to pay a fine of $12,500. In addition, they are jointly liable for paying restitution to the Internal Revenue Service for back taxes in the amount of $900,000.
In March 2006, the Loguidices pled guilty to a previously filed indictment, which included money laundering associated with the embezzlement of employee pension funds, theft from programs receiving Federal funds, and mail fraud. As part of the scheme, the Loguidices submitted false, unfiled corporate tax returns, as well as other materially false information, to New York City and New York State grantee agencies to obtain Disadvantaged Business Enterprise (DBE) certification. ADC, Mrs. Loguidice’s certified DBE trucking and excavation company, was awarded several subcontracts, as a DBE, but Mr. Loguidice’s company, JCS Construction, as well as several other companies he owned (in a lesser capacity), actually performed the work. As part of the conspiracy, the Loguidices obtained a total of approximately $7.8 million in DBE subcontracts that they were otherwise ineligible for.
The Loguidices have forfeited $1.1 million to the Government. This investigation was conducted jointly with members of the Long Island Federal Construction Fraud Task Force. The Loguidices and their companies were referred to FHWA for suspension/debarment in December 2007 and a decision in this matter is pending.