Owner of New Jersey-based DBE Indicted for Bankruptcy Fraud
On January 5, 2016, Miguel Demenjon, owner and president of a New Jersey Disadvantaged Business Enterprise (DBE), Mimosa Construction Inc. (Mimosa), was indicted in U.S. District Court, New York, New York, for bankruptcy fraud as part of an ongoing DBE and prevailing wage fraud investigation. Mimosa performed work on various Federal Highway Administration-funded bridge projects in the New York metropolitan area, including the Alexander Hamilton Bridge Rehabilitation Project (AHBP), where Mimosa had a $7.7 million sub-contract. The AHBP, at a cost of $416 million, was the largest single-contract construction project in the history of the New York State Department of Transportation when it was awarded. It was funded almost entirely by Federal funds.
While the AHBP project was ongoing, Demenjon declared bankruptcy. The OIG investigation developed information indicating that beginning in 2011 through October 2015, Demenjon concealed and transferred assets of Mimosa to undermine ongoing bankruptcy proceedings. It is alleged that Demenjon cashed over $1 million in checks from various contractors, at check-cashing facilities, yet failed to pay his workers or certain creditors—all while concealing these funds from the bankruptcy court.
We are conducting this investigation with the U.S. Department of Labor – 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.