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Investigations

Date

Conspirators in Surety Bond Fraud Scheme and Affiliated Businesses Debarred

On July 14 and July 15, 2022, Alexander Xavier, Timothy Castracane, Henry Hattendorf, Robert Wann, and 11 affiliated businesses were debarred from Federal procurement and non-procurement programs. Xavier and the following businesses were debarred for a 10-year period: Pharos Investment Trust, Rex Imperator, The Xavier Foundation, The Xavier Group, and Hampton Investment Fund. Castracane, Hattendorf, Wann, and the following businesses were debarred for a 5-year period: CMH Secure LLC, CMH Secure Trust, CMX Trust, Frumist Investment Trust, Equus Terram Investment Group, and Newland Holdings & Investments, Inc.
 
The defendants were previously convicted in the U.S. District Court for the Southern District of Florida of conspiracy to commit mail and wire fraud. As outlined in court documents, the defendants, through various businesses, unlawfully enriched themselves by obtaining payments from construction companies in exchange for fraudulent surety bonds secured by valueless gold certificates. The fraud scheme included the March 2015 sale of a bogus surety bond, purportedly worth nearly $23 million, to contractors working on the Port Authority of New York and New Jersey's Goethals Bridge replacement project funded by the Federal Highway Administration. The victims paid over $919,000 for the fraudulent surety bond.
 
DOT-OIG conducted this investigation with the Environmental Protection Agency-OIG, the Port Authority of NY & NJ-OIG, the Department of Veterans Affairs-OIG, and the Internal Revenue Service-Criminal 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.