FilAm in $121M Fraud Case

by Cynthia De Castro/Asianjournal.com

LOS ANGELES – A FilAm and a former executive of a highway construction firm appeared to have conspired together to defraud the US Federal government of over a hundred million dollars.

Dennis F. Campbell, former vice president at a highway construction firm, pleaded guilty a few days ago to a scheme that prosecutors say improperly netted his company $121 million in federal highway contracts set aside for minority-owned firms. He faces up to five years in prison on the felony charge of conspiracy to defraud the Federal government.

Business Front

To level the business playing field, many State governments have created policies to increase opportunities for minority-owned firms. Most of these programs focus on the construction industry, because it receives a large amount of public money and offers well-paying jobs for people without advanced education. Such is the case in Pennsylvania which offers highway construction contracts to minority-owned firms.

Since Campbell’s company, Schuylkill Products Inc., which manufactures concrete bridge components, and a subsidiary, CDS Engineers Inc, which installs them, were not eligible to get contracts for a federally funded highway work in Pennsylvania, a scheme was devised involving a minority-owned firm, Marikina Construction Corp, based in Connecticut. Owned by FilAm Romeo Cruz and certified as a minority-owned firm by the Pennsylvania Highway Department, Marikina is eligible for the US Department of Transportation’s minority contracts.

For a period of over 14 years, Schuylkill Products used Marikina Construction Corp as a front to get highway construction contracts in Pennsylvania, according to the guilty plea read in court.

Assistant US Attorney Bruce Brandler said that while it appeared that Marikina Construction Corp. was bidding for and performing the work, in reality those tasks were carried out by employees of Schuylkill Products and CDS.

“In essence, Schuylkill Products and CDS rented Marikina’s name,” Brandler told US District Judge Sylvia Rambo. Marikina received a payment, part of which was kicked back to Campbell and an unnamed CDS supervisor, Brandler said.

Prosecutors said that Schuylkill Products and CDS prepared bids on Marikina’s letterhead, put magnetic placards with the Marikina logo on their work vehicles and prepared phony payroll and vehicle lease records to conceal their companies’ roles in the projects.

Indictment

Campbell spoke little other than to say “Yes, your honor” when questioned by the judge. No sentencing date has been set and Brandler said that would likely happen after the completion of the investigation.

Brandler said investigators are examining whether a similar scheme was conducted in other States. No one other than Campbell has been charged.

“We’re trying to take corrective action and do what the government wants on the program,” Jim West, an attorney for Schuylkill Products, said. “We have taken some corrective action and we will take more as it goes along.”

Robert Lacobelle, the attorney for Cruz and Marikina, declined tocomment on the case.

(www.asianjournal.com)

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