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Investigations

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Final Defendant Found Guilty in Major Contract Fraud Case

In the largest contract fraud case in DOT history, Richard E. Wall, St. Louis, MO, regional sales manager for Inland Steel of Chicago, was convicted of mail fraud and conspiracy by a Federal jury in Baton Rouge, LA. The conviction ended a 5-year investigation into the substitution of substandard metal pipe on state and Federal highway construction projects in Louisiana from 1992 to 1997. Wall was found guilty of concealing the unapproved pipe from state and Federal inspectors and conspiring to falsely label the substandard steel so it looked like approved steel. The pipe is used in culverts to carry runoff water under highways and roads. The lifespan of the unapproved pipe is estimated to be as brief as 20 years, compared with 70 years for the approved polymer-coated pipe. In January 2001, a $30 million civil settlement was reached with Isphat-Inland Inc. (formerly Inland Steel of Chicago) and Contech Construction Products of Middletown, OH. A sentencing date for Wall and the other four defendants has not been set. OIG conducted this investigation jointly with the FBI.