Former CEO Sentenced To Pay $1.2M and Over Five Years in Prison for Fraudulent Bonding Scheme in California
On August 3, 2015, Able Carreon, former chief executive officer of Tripartite Escrow Corporation (Tripartite), was sentenced in U.S. District Court, Fresno, California. He was sentenced to serve 65 months in prison and to pay $1,253,000 in restitution for mail fraud and aggravated identity theft related to a scheme involving surety bonds for government contracts.
Surety bonds are required for certain federal government contracts. The surety bonds compensate the government for the financial loss incurred if a contractor defaults. Under federal regulations, in order to be acceptable, the bonding company must pledge assets with a value equal to or exceeding the amount of each bond, and submit a sworn affidavit disclosing the identity of the surety and verifying the existence and acceptability of the assets.
The investigation revealed that between April 2005 and May 2011, Carreon and Tripartite defrauded the United States and private companies by offering bonding services to prospective government contractors. The services included false bid bonds to secure a bid on a government contract, and false performance and payment bonds to insure the work on a government contract. As collateral he pledged stock that did not exist, or was worth substantially less than represented, or was pledged across multiple bonds without full disclosure. He also used forged notary stamps and signatures and other forged signatures on the bond documents. Once the false and fraudulent performance and payment bonds were accepted by the contracting government agency and the work began, the government would make payments on the contract to the contractor, including Carreon's bond premium. Altogether, the U.S. and government contractors paid for false and fraudulent payments and performance bonds, at a loss of approximately $1.2 million.
We are conducting this investigation with the U.S. Department of Interior OIG, the Defense Criminal Investigative Service, Army Criminal Investigation Division, Air Force Office of Special Investigations, Department of Homeland Security OIG, General Services Administration OIG, with assistance from the Federal Highway Administration, Western Federal Lands.