August 16, 2016
Idaho Construction Companies and Owners Debarred by FHWA for 56 Months for DBE Fraud
On August 16, 2016, FHWA debarred Elaine Martin, MarCon, Inc. (MarCon), and MarCon Precast, Inc. (Precast) for 56 months, and debarred Darrell Swigert, Tory Martin, and MC Group, Inc., for 36 months. The debarments stem from the Federal jury trial convictions in 2013 of Elaine Martin and Swigert related to fraud charges associated with the Disadvantaged Business Enterprise (DBE) Program, including conspiracy; false statements; obstruction of justice; and mail, wire, and tax fraud. Elaine Martin is the former president and owner of MarCon and Precast, Swigert is a former co-owner of MarCon, and Tory Martin is a former senior official of MarCon and Precast and the vice-president of MC Group.
On February 27, 2014, Elaine Martin was sentenced in U.S. District Court, Boise, Idaho, to 84 months in prison and was ordered to pay restitution of $98,825 to the IRS, $32,575 to the Idaho DBE Program and $22,859 in prosecution costs. She was also ordered to forfeit $3 million in proceeds she received from her fraudulent activity. In March 2014, Swigert was sentenced to 3 months in prison and was ordered to pay a $5,000 fine and perform 100 hours of community service for his role in the DBE fraud scheme.
Elaine Martin submitted false applications so that MarCon could participate in the U.S. DOT DBE Program and the U.S. Small Business Administration (SBA) 8(a) Program. To be admitted into the programs, owners must demonstrate economic disadvantage, in part by having a personal net worth below a certain statutory cap. Martin took steps to artificially lower her personal net worth, such as transferring assets into the names of others in order to appear economically disadvantaged. This allowed MarCon to fraudulently qualify for the DBE and SBA 8(a) programs.
Tory Martin was debarred, along with MC Group, Inc., due to his position as a senior official of MarCon and Precast, his role in the companies, and his apparent knowledge of the DBE fraud scheme. Additionally, in August 2013 after Elaine Martin and Swigert were charged with DBE fraud, Tory Martin fraudulently used MarCon funds to help MC Group bid on a federally funded guardrail project in Idaho.
DOT-OIG investigated this case jointly with the SBA-OIG, IRS-CID, and the Federal Bureau of Investigation.
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.