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FTA Suspends the Former CEO of Virginia Regional Transit, an Automotive Repair Business, and Its Former Owner for a Bribery and Overbilling Scheme

On June 24, 2016, the Federal Transit Administration (FTA) suspended and proposed to debar Mark McGregor, Thomas Ahalt, and Mobile Auto Truck Repair (Mobile Auto) from participating in federally funded projects. McGregor served as the Chief Executive Officer of Virginia Regional Transit (VRT), a nonprofit organization that provides transportation services throughout northern Virginia. Ahalt is the former president and owner of Mobile Auto, Purcellville, VA. McGregor and Ahalt pleaded guilty to participating in a bribery scheme that caused $380,000 in losses to the Government.

In April 2016, Ahalt pleaded guilty in U.S. District Court, Alexandria, VA, to conspiracy to commit bribery concerning programs receiving Federal funds. On June 21, 2016, he was sentenced to 12 months probation and ordered to pay $412,800 in restitution to FTA and $103,200 in restitution to Loudoun County, VA. On May 16, 2016, McGregor was charged and pleaded guilty to bribery concerning Federal program funds for his role in the bribery scheme.

Ahalt rented space at VRT and performed maintenance and repair on buses and vehicles owned and operated by VRT. VRT provides transportation services throughout northern Virginia and is funded by a combination of Federal, State, and local grants, including grants from DOT. From January 2007 through December 2015, Ahalt and McGregor agreed Mobile Auto would submit—and VRT would approve—false invoices for certain labor charges. In exchange, Ahalt would make biweekly kickback payments to McGregor totaling half of the additional labor charges. Between 2007 and 2015, VRT paid Mobile Auto approximately $380,000 in fraudulent additional labor charges. During the same period, Ahalt gave McGregor approximately $190,000 in illegal kickback payments. 

In addition to the kickback payment scheme, Ahalt also regularly caused Mobile Auto to submit false invoices to VRT for parts and labor associated with maintaining VRT vehicles. Ahalt, for example, frequently added fictitious entries to invoices for repairs that had not occurred and for parts that had not been installed. Mobile Auto submitted at least $136,000 in false invoices to VRT between 2012 and 2015. VRT subsequently paid these false invoices using, in part, Federal funds from DOT. 

DOT-OIG is conducting this investigation with the Federal Bureau of Investigation.

Note: A suspension or debarment frequently covers a specific period of time. Please consult the System for Award Management to determine whether a company or individual is currently suspended or debarred.