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2 Indicted in Project Skimming of $4.8M

Tuesday, July 16, 2013

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A former executive with one of the nation’s largest construction contractors is accused of orchestrating a kickback scheme that drained more than $4.8 million from his company during a project.

A federal grand jury has indicted Clone Jefferson Oliver, former vice president of St. Louis, MO-based Alberici Constructors Inc., in the case, in which funds were allegedly siphoned off a water plant construction project in Arlington, VA,  to buy beach houses, diamonds, boats and other luxuries.

Oliver, 56, of Apollo Beach, FL, was indicted June 13 on five counts of mail and wire fraud and two counts of money laundering, according to an FBI announcement.

Supplier Charged

An executive of an Alberici vendor was also indicted in the case.

Kenneth Marc Simmons, 55, of La Grange, GA, also faces five counts of mail and wire fraud. Simmons ran Industrial and Municipal Supply (IMS), of West Point, GA, which supplied materials to Alberici for the water plant project.

Arlington County Water Pollution Control Plant
Arlington Co. Environmental Services / Flickr

While the Arlington County Water Pollution Control Plant was undergoing a $568 million upgrade, the project manager and a VP for Alberici Constructors, Clone Jefferson Oliver, allegedly used a fake businesses and other contractors to siphon close to $5 million. 

Each count of mail or wire fraud carries a maximum prison term of 20 years and/or fines up to $250,000. Oliver's counts of money laundering each carry a maximum prison term of 10 years and/or a fine of up to $250,000. If convicted, both defendants would be required to make restitution to Alberici.

A spokesperson for the FBI confirmed on Monday (July 15) that both Oliver and Simmons turned themselves in the week after the indictment.

Real and Fake Companies

According to the indictment, Oliver was the project manager for Alberici on a project to expand the Water Pollution Control Plant in Arlington, VA. The cost of the project, which started in September 2006, was $238 million, according to the FBI.

The plant expansion, part of a $568 mlllion upgrade, increased capacity at the facility from 30 million gallons per day to 40 million gallons per day. The project involved building three new secondary clarifiers, two new aeration basins, new pump stations, and new storage tanks, according to Alberici.

Oliver and Simmons allegedly collaborated on submitting inflated invoices and false change orders for project materials provided by Simmons' business. When IMS was paid for the fraudulent invoices, Simmons kept a share and forwarded kickbacks to Oliver, the indictment charges.

Many of the payments Simmons made were to a dummy corporation formed by Oliver called Advanced Construction Solutions. The dummy supplier had the same initials as those of American Construction Services, of Tampa, FL, an actual supplier on the Arlington project.

The indictment refers to Oliver's company as the "fake ACS" and American Construction Services as the "real ACS."

Alberici Constructors kickback scheme
Alberici Constructors

The federal government has seized two Florida houses, boats, motorcycles, diamonds and a Mercedes while tracing to proceeds of the alleged kickback scheme.

Allegedly, Oliver and Simmons used the real ACS to draw even more money out of Alberici. Oliver would direct the owner of the real ACS to inflate his company's invoices and, upon payment by Alberici, to transfer the inflated payment to IMS, which would then send money on to Oliver. Authorities estimate that Alberici lost more than $1.7 million this way.

Authorities did not identify the real ACS individual implicated and did not say whether he or she would be charged. Efforts to reach the companies on Monday (July 15) were unsuccessful.

Alberici filed a lawsuit in April 2011, seeking $4.8 million in damages from Oliver, two subcontractors, and the "fake ACS," plus punitive damages and fees on nine counts ranging from fraud to breach of contract and unjust enrichment, the St. Louis Business Journal reported.

"Oliver recognized ... that he had sufficient control over the project's financial records to be able to divert some of the profits of the project while still being able to manage the project to a profitable completion for Alberici," that suit states.

The lawsuit said Alberici discovered the alleged fraud during an internal investigation.

Oliver's actions did not result in the county being overcharged for the project, Arlington County officials said in May 2011.

Millions in Seized Assets

The government has filed civil forfeiture actions against two properties that were allegedly purchased or financed with funds from the scheme. One home, in Apollo Beach, FL, was allegedly purchased for $1.1 million in 2008. The other, in Zephyrhills, FL, had first and second mortgages that were allegedly paid off with the stolen funds.

Additionally, federal authorities have seized two boats and a boat trailer; two SeaDoo water crafts; a Mercedes vehicle; a diamond ring; proceeds from the sale of two Harley Davidson motorcycles and a boat dock; and proceeds from the refinancing of a property on Lake Martin in Alabama. All were allegedly bought with proceeds of the scheme.

Clone Jefferson Oliver
Alberici Constructors

The two men each face five counts of mail and wire fraud; Oliver faces an additional two counts of money laundering. Both face many years in prison.

"No matter how sophisticated a fraud scheme, it will eventually be exposed," said Dean C. Bryant, Special Agent in Charge of the FBI St. Louis Division.

"The FBI aggressively seizes items acquired with stolen money and returns the value of those items back to the victims."

About the Companies

Sybil Smith, Special Agent in Charge of the St. Louis Field Office, added, "IRS-Criminal Investigation is committed to unraveling complex financial transactions and money laundering schemes where individuals attempt to concreal the true source of their money."

Alberici Constructors, founded in 1918, offers general contracting, construction management and design-build solutions for industrial and commercial markets.

Industrial and Municipal Supply provides large, commercial pipes to general contractors and utilities contractors.

American Construction Services, located in Tampa, FL, is a full-capability construction services contractor for commercial and residential construction. The company specializes in utility, industrial, in plant and commercial construction projects.

This case was investigated by the FBI and Internal Revenue Service Criminal Investigation. Assistant United States Attorneys James E. Crowe, Jr. and Anthony Franks are handling the case for the U.S. Attorney's Office.

   

Tagged categories: Construction; Contractors; Laws and litigation; Lawsuits; Subcontractors; Wastewater Plants

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