December 1, 2016
New York DBE Sentenced To Pay $250,000 for His Part in DBE “Front” Scheme
On December 1, 2016, Ghusalal L. Patel, owner, Vista Engineering Corporation (Vista), Ridgefield, New Jersey, was sentenced to time served and ordered to pay a $50,000 fine and a $600 special assessment. Patel pleaded guilty to conspiracy and mail and wire fraud charges for participating in a $22 million Disadvantaged Business Enterprise (DBE) fraud scheme that involved Federal Transit Administration (FTA) funds. Patel also agreed to forfeit $200,000 as part of a plea agreement.
Patel admitted that he conspired with Granite Halmar Construction (GH) officials and a non-DBE subcontractor, A.J. McNulty and Company (AJM), to fraudulently utilize Vista as a “front” DBE on a New York State Metropolitan Transportation Authority (NYS MTA) contract worth approximately $220 million, which had received FTA funds. GH awarded a DBE subcontract to Vista, a certified DBE, to furnish and install structural steel worth $22 million. However, Patel admitted that AJM—and not Vista—performed all of the DBE subcontract work. Additionlly, the conspirators submitted fraudulent documentation to NYS MTA to generate the appearance that Vista had performed the DBE work.
Patel provided substantial cooperation in the investigation. DOT-OIG is working this case jointly with the Internal Revenue Service Criminal Investigation Division, Department of Labor (DOL) OIG, and MTA-OIG.