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4 PennDOT Inspectors Sentenced

Monday, June 29, 2015

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BRIDGEPORT, PA--Four former Pennsylvania highway and bridge inspectors will avoid prison for their roles in a $1.2 million overbilling and kickback scandal that has engulfed the state Department of Transportation's Philadelphia-area district.

Ex-inspectors Generoso Palmieri, Christopher Lauch, Frank DiMichele and John Cavanaugh are all now cooperating with the government, the Pennsylvania Attorney General's Office announced.

DiMichele,Palmieri,Cavanagh Lauch
PA Attorney General's Office

Four inspectorstwo PennDOT employees and two contractorspleaded guilty to taking bribes in return for ignoring falsified time sheets and mileage reports. From left: Frank DiMichele and Generoso Palmieri, of PennDOT; John Cavanaugh, of CMC; and Christopher Lauch, of Czop-Specter.

The defendants pleaded guilty May 26 to participating in the widespread bribery and corruption scheme and were sentenced in the Pennsylvania Court of Common Pleas.

Each was sentenced to 24 months of probation and ordered to pay restitution as follows: Palmieri ($39,786.20); Lauch ($51,670.11); DiMichele ($43,668.59); and Cavanaugh ($21,868.88).

A Dozen Defendants

DiMichele, 49, and Palmieri, 60, both worked directly for PennDOT as inspectors.

Cavanaugh, 61, worked for Construction Methods and Coordination Inc. (dba CMC Engineering), a PennDOT inspection contractor from Kimberton, PA. CMC agreed in February to pay more than $1.3 million to reimburse state and federal transportation agencies for losses due to fraud by its bridge inspectors.

Cavanagh was one of three CMC inspectors indicted last December in the PennDOT scandal.

Lauch, 50, meanwhile, was one of three inspectors for Czop/Specter Inc. who were indicted in December. Like CMC, Czop/Specter contracted with PennDOT for inspection services. In all, 10 people were charged in the December sweep.

Davidt8 / Public Domain via Wikimedia Commons

"[A]t least one CMC inspector participated in the fraud while working on the 100% federally funded Girard Point Bridge construction project," pictured in 2010, the Office of Inspector General said.

Czop/Specter CEO Christopher M. Czop was charged in April with illegally securing more than $1 million in profits by rigging contract bids and profiting from his employees who fraudulently inflated billable hours and mileage claims to PennDOT.

And in July 2014, criminal charges were filed against PennDOT contractor Thanh Nguyen, 63, who allegedly stole $3.6 million through a false invoice and bribery scheme that grew out of millions of dollars in road, tunnel and bridge contracts that his firm had with PennDOT's District 6.

Also charged at that time was Robert Slamon, 55, another former Czop Specter inspector.

'Widespread Abuse'

The PennDOT investigation began in March 2013, when a confidential source provided the Attorney General's Office with "evidence of widespread abuse" within District 6's Highway Occupancy Permit Program (HOP).

PA Attorney General's Office

This flowchart illustrates the kickback scheme's pecking order, according to the AG's office.

The source is identified only as a former consultant inspector for a company contracted by PennDOT to perform inspections under the HOP program. The source's information "has been corroborated," the AG's Office said.

The inspector told authorities that "consultant inspectors were systematically overbilling for time they were allegedly performing HOP inspections."

In addition, the office said, "evidence has been obtained that many of the inspectors were providing illegal financial remunerations to PennDOT District 6 supervisors who permitted the overbilling abuse to occur."



Tagged categories: Bridges; Consultants; Fraud; Government; Government contracts; Inspection; North America; Program/Project Management; Roads/Highways; Tunnel

Comment from Jim Johnson, (6/29/2015, 10:14 AM)

That is quite a lesson to teach others - Anyone can accept bribes and participate in corruption and all you will get is a hand slap of a few months probation and NO jail time. Hey! We all need to teach this to our kids! They may want a quick buck at some point in their life too!

Comment from Mark Gozion, (6/29/2015, 1:43 PM)

It's really hard to believe that those involved in MILLIONS of dollars in bribery and corruption get NO jail time! How is this possible? Yet go ahead and steal $5,000 or a car from someone and you're getting months to "years"! Can someone please explain this to me?

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