Investigations

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New Jersey-Based DBE Firm and Its Owner Suspended by FHWA

On March 15, 2016, FHWA suspended Miguel Demenjon and his DBE company, Mimosa Construction, Inc. (Mimosa) from Federal contracting. In January 2016, Demenjon was indicted in U.S. District Court, New York, NY, for bankruptcy fraud as part of an ongoing DBE and prevailing wage fraud investigation.

Mimosa performed work on various FHWA-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. 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 AHBP was ongoing, Demenjon declared bankruptcy. DOT-OIG’s 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 but failed to pay his workers or certain creditors—all while concealing these funds from the bankruptcy court.

We are conducting this investigation with the Department of Labor Office of Inspector General.

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.