Tuesday, April 10, 2012

Record DBE Fraud Conviction For Prestressed Beam Supplier

Last week a jury in Harrisburg, Pennsylvania convicted Joseph W. Nagle, former president and CEO of Schuylkill Products and CDS Engineering, suppliers of prestressed concrete products for highway construction, of 28 counts of fraudulent conduct for a 15 year scheme defrauding U. S. taxpayers, PennDOT and SEPTA by using Connecticut based certified DBE Marikina Construction as a front on more than 300 federally funded PennDOT and SEPTA projects from 1993 through 2008. The verdicts, returned April 5, found Nagle, of Deerfield Beach, Florida, guilty of 11 counts of wire fraud, 11 counts of money laundering and six counts of mail fraud, following prosecution arguments that Schuylkill and CDS prepared project bids on Marikina letterhead, put Markinia’s magnetic plackards on Schuylkill work vehicles, and prepared phony payroll and vehicle lease records to conceal the fact the work was performed by Schuylkill and CDS rather than Marikina.

Assistant U. S. Attorney Bruce Brandler argued to the trial judge that “In essence, Schuylkill Products and CDS rented Marikina’s name.” Marikina received payments under the contracts, part of which were kicked back to Schuylkill executives in the scheme. Romeo P. Cruz, owner of Marikina, previously pleaded guilty to chrges in connection with the 15 year DBE fraud, along with three middle managers at Schuylkill. According to Middle District of Pennsylvania U. S. Attorney Peter J. Smith, the scheme, involving more than $136 million in government contracts, is the largest DBE fraud case in U. S. history. When he is sentenced, Nagle will be facing up to 330 years of imprisonment and $250,000.00 in fines, plus restitution on each fraudulent project.

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