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Insulation Contractor Admits $1M Fraud

Tuesday, November 12, 2013

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A convicted felon who ran four contracting companies in Connecticut may be headed back to federal prison after pleading guilty in a million-dollar fraud scheme.

Edward Petrucci, 56, of Orange, CT, waived his right to indictment and pleaded guilty Thursday (Nov. 7) to one count each of wire fraud and mail fraud before Senior U.S. District Judge Alfred V. Covello in Hartford.

Insulation, Asbestos Work

According to court documents and statements made in court, Petrucci operated Womco Insulation Inc., Incor Group Inc., D & N Insulation Company, and Petco Insulation Company, all based in West Haven, CT.

Wikimedia Commons / Bill Bradley

Authorities said Petrucci's four companies performed construction, insulation installation and asbestos removal in large-scale building projects in four states.

The companies performed construction services, mechanical insulation, and asbestos removal in large-scale building projects in Connecticut, New York, Massachusetts, and Florida, Acting U.S. Attorney Deirdre M. Daly said.

Those contracting enterprises followed Petrucci's 2006 release from federal prison, where he had served a year for filing false corporate and personal tax returns and dodging more than $1 million in federal income taxes.

Money Problems

Unable to secure bank funding for his new enterprises, Petrucci turned to Platinum Funding Services LLC, a so-called factoring company in New York that helps provide funding to client companies.

"A factoring company typically purchases a company’s receivables at a discount, providing the company with liquid assets at a discounted rate while purchasing the right to collect on the purchased receivables at a later date," the FBI explained.

At first, the FBI said, Platinum regularly bought Petrucci’s invoices "from legitimate insulation jobs throughout Connecticut and collected on those invoices without any serious problems."

Federal Court Building - CT
U.S. District Court - District of Connecticut

Petrucci was the second West Haven, CT, contractor in two days to plead guilty in a federal fraud case. The earlier case involved $860,000 in bribes by a painter.

Later, however, Petrucci began selling fake invoices to Platinum for jobs that had not been, and would not be, performed.

In this way, Petrucci's companies took in more than $1 million from Platinum from December 2007 to April 2009, an FBI investigation found.

Petrucci faces up to 20 years in prison on each count when he is sentenced Jan. 30.

Contractor Crime

Petrucci pleaded guilty one day after a 77-year-old painting contractor in the same town pleaded guilty to paying $860,000 in bribes to a local public housing official to win contracts.

In that case, Harry P. Miconi, of West Haven, admitted to conspiracy to commit bribery in the federally funded housing program.

For five years, prosecutors said, Miconi and his businesses made a series of payments to a senior-level official at West Haven Housing Authority and Four Star Development Company LLC. Miconi will be sentenced Jan. 29.



Tagged categories: Asbestos; Building envelope; Business operations; Commercial contractors; Construction; Insulation; Laws and litigation; Maintenance + Renovation

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