Former Pennsylvania Construction Company President Sentenced to 7 Years in Jail for His Role in the Largest DBE Fraud in DOT History
On June 30, 2014, Joseph W. Nagle, the former president of Schuylkill Products Inc. (SPI), was sentenced in U.S. District Court, Harrisburg, Pennsylvania, to 84 months imprisonment and ordered to pay fines totaling $27,600 for his role in the largest reported Disadvantaged Business Enterprise (DBE) fraud in the Department's history.
Nagle was President, Chief Executive Officer and part- owner of SPI and its wholly-owned subsidiary CDS Engineers Inc. (CDS) until April 2009 when SPI was sold. The investigation revealed that Nagle, and others defrauded the U.S. Department of Transportation (DOT) DBE program for more than 15 years, involving more than $136 million in highway transportation contracts. SPI and CDS used a Connecticut highway construction company, Marikina Construction Corporation (Marikina) as a shell DBE corporation, to obtain DBE subcontracts for bridge beam installation projects with the intention of having SPI and CDS employees perform, manage, control, and supervise the beam installations. SPI and CDS officials fraudulently prepared business documents on Marikina letterhead, used a Marikina payroll account to pay a CDS supervisor and work crew, and paid Marikina a fixed fee for the use of its name in obtaining the DBE contracts.
In April 2012, after a four-week jury trial, a federal jury found Nagle guilty on 26 charges, including one count of conspiracy to defraud the U.S. DOT and to commit wire and mail fraud, seven counts of wire fraud, six counts of mail fraud, one count of conspiracy to commit money laundering, and 11 counts of money laundering.
The investigation was conducted by the U.S. DOT – Office of Inspector General (OIG), the Federal Bureau of Investigation, the U.S. Department of Labor – OIG, the Internal Revenue Service – Criminal Investigation Division, with substantial assistance from the Federal Highway Administration.