Owner of Pennsylvania DBE Construction Firm Charged with Fraud
On October 21, 2014, Watson Maloy, President, WMCC Incorporated (WMCC), was charged in U.S. District Court, Pittsburgh, Pennsylvania, with conspiracy to commit mail and wire fraud. The charge is related to an alleged disadvantaged business enterprise (DBE) fraud scheme involving federally funded bridge projects. WMCC, a certified DBE, entered into DBE subcontracts valued at approximately $2.3 million with Century Steel Erectors (CSE), a precast concrete erection firm located in Dravosburg, Pennsylvania. The prime contracts related to this scheme are valued at $42.6 million.
The information alleged that Maloy and co-conspirators used WMCC as a front company to obtain profits from DBE contracts slated for legitimate DBE firms. The information also alleged that CSE officials and not WMCC personnel actually found, negotiated, coordinated, performed, managed, and supervised the DBE subcontracts. Maloy's firm allegedly failed to perform a commercially useful function and CSE actually completed DBE work that included negotiating crane rentals, ordering supplies and materials, and recruiting union workers.
To conceal the scheme, CSE officials allegedly used WMCC letterhead and email accounts when communicating with general contractor and Pennsylvania Department of Transportation officials. CSE personnel allegedly possessed WMCC business cards, t-shirts, and hard hats, as well as magnetic WMCC placards to conceal CSE logos on construction vehicles.
Maloy allegedly received a fee for his participation in the scheme, which resulted in approximately $1.8 million in illicit proceeds.
We are conducting this investigation with the Federal Bureau of Investigation and the Pennsylvania Turnpike Commission – Office of Inspector General.
Note: Indictments, informations, and criminal complaints are only accusations by the Government. All defendants are presumed innocent unless and until proven guilty.