Investigations

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FHWA Suspends Eleven Individuals and Two Companies Related to an Ongoing PennDOT Fraud and Public Corruption Investigation

On April 14, 2015, the Federal Highway Administration (FHWA) suspended, pending debarment, 11 individuals and 2 companies for their alleged roles in a widespread corruption and bribery scheme that affected 27 federally funded maintenance and construction contracts in Pennsylvania. Previously, in December 2014, state criminal complaints were filed in Bridgeport, Pennsylvania, charging ten individuals with various crimes centered around the scheme. 

Those complaints alleged that Alex Morrone, former Pennsylvania Department of Transportation (PennDOT) permits manager, and William Rosetti, former Philadelphia County permit manager, demanded kickbacks from project inspectors while requiring them to falsify time, attendance, and payroll records to generate illicit cash flow. They also alleged that the corrupt inspectors were paid more than $500,000 through false payroll and invoice submissions. The complaints also stated that project inspectors performed home improvement services for PennDOT officials while payroll records falsely indicated that they were performing inspection duties. In addition to the monetary fraud, the state grand jury contended that the scheme jeopardized safety because project inspectors, hired to protect the public and Pennsylvania highway infrastructure, were often absent from jobsites and therefore failed to perform inspection duties. These inspectors then allegedly falsified documents to inflate overtime income and mileage reimbursements and then kicked money back to the PennDOT managers.

Previously, in July 2014 state charges were filed against Thanh Nguyen alleging that, through his companies V-Tech and Utility Line Clearance, he stole approximately $3.6 million for work not performed, and in part, double billed for services and supplies not provided as stipulated in the PennDOT contracts. Since 2009, Nguyen has received approximately $26 million in PennDOT general maintenance contracts for Pennsylvania roadways and bridges. Nguyen is also accused of defrauding PennDOT by inflating work hours and the number of people working at various job sites, and billing for equipment and materials not purchased, rented or used.

FHWA suspended the following: David Betzner, John Cavanaugh, Joseph DeSimone, Frank DiMichele, Brandon Grosso, John Laspada, Christopher Lauch, Alex Morrone, Thanh Nguyen, Generoso Palmiere, William Rossetti, Utility Line Clearance, and V-Tech Services, Inc. 

Note: Exclusion actions (suspensions and debarments) are frequently for a specific period of time and the System for Award Management "Sam.gov" should be consulted to find whether a company is currently excluded.