Two Contractors Indicted For DBE Fraud in Western New York
On March 1, 2016, a Federal grand jury in Buffalo, NY, indicted David Pfeiffer, the owner and president of Man O’ Trees Inc. (MOT), and Thomas Colton, the majority owner and president of Sue-Perior Concrete and Paving Inc. (Sue-Perior), and charged each with mail fraud and conspiracy to commit mail fraud relating to a disadvantaged business enterprise (DBE) fraud scheme. Pfeiffer and Colton allegedly defrauded American Recovery and Reinvestment Act (ARRA) funded projects valued at approximately $15.5 million. Pfeiffer was also charged with providing false statements to a financial institution.
The indictment alleged that between May 2009 and 2013, Pfeiffer and Colton conspired to defraud the Niagara Frontier Transportation Authority (NFTA) in order to obtain Sue-Perior’s status as a DBE and the subsequent recertification renewals. Sue-Perior allegedly submitted false DBE certification applications to NFTA. MOT then used Sue-Perior to obtain government contracts. However, Sue-Perior did not provide a commercially useful function on those projects. In addition, Pfeiffer allegedly maintained financial control of both companies and repeatedly submitted false documentation to a bank to obtain various loans.
Sue-Perior allegedly had not performed the work credited on several DOT and ARRA funded projects for the City of Niagara Falls, New York State DOT, and Buffalo Urban Development Corp. The indictment further alleged that Pfeiffer submitted false personal financial statements to obtain credit extensions for his business.
A June 2015 criminal complaint for forfeiture alleged that MOT and Sue-Perior used part of the premises of 201 Ganson Street, Buffalo, NY (offices of MOT and Sue-Perior) to operate the scheme and the defendant’s property constituted approximately $180,504 in proceeds traceable to the fraud violations.
DOT-OIG is conducting this investigation with DOL-OIG, NYS DOT-Investigations Bureau, and the FBI.
Note: Indictments, informations, and criminal complaints are only accusations by the Government. All defendants are presumed innocent unless and until proven guilty.