Chubb Group has been notifying obliges in
nine states that performance and payment bonds supporting contracts of 22
construction companies and bearing the Chubb surety seal and purported
signatures are forgeries. The 22 contractors presenting these bonds were bilked
out of over $3 million in bond premiums over the last year and a half by the
forgers, who, among other things, misspelled the name of one of the Chubb
executives whose forged signature appears on the bonds. The contractors
purchasing the forged bonds have been required to pay another premium and
purchase a valid replacement bond in order to continue with work on the
projects affected.
At
least two forgers acting as individual sureties have been identified as the
source of the forged Chubb bonds, and Chubb has successfully obtained summary
judgment for fraud and racketeering against the two forgers in the U. S.
District Court for the Northern District of Florida, in Pensacola. It remains
to be seen, however, whether Chubb and its lawyers can ever track down and
actually collect from the forgers.
It
seems several of the victims of this bond forgery scheme are minority owned or
woman owned contractors. Earlier performance bond forgery schemes resulting in
criminal conviction of the forgers have bilked construction companies out of as
much as $22.5 million in fraudulent bond premiums over a three year crime
spree. That particular forger was eventually caught and sentenced to ten years
in federal prison.
If
your construction business works even occasionally on bonded projects, make
sure you do your due diligence and follow the advice of Surety and Fidelity
Association of America Corporate Counsel Robert Duke: “The thing that can be
done, and we preach, is to create awareness among obligees that it’s a five
minute phone call to verify the authorization of a bond and avoid any of this.”
