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Firms Owe $1.33M in DBE Bridge Scheme

Friday, February 19, 2016

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Three Pennsylvania contractors have avoided jail time for their roles in a 16-year disadvantaged business enterprise (DBE) fraud scheme involving hundreds of state bridge projects.

Judy Noll, owner of Karen Construction Inc. of Kutztown, PA, was sentenced Feb. 3 in U.S. District Court, Philadelphia; Dennis Weber, Dale Weber, and Carl M. Weber of Steel Service Inc. (Weber Steel) of Kutztown were sentenced Jan. 11, the U.S. Department of Transportation's Office of the Inspector General said in a statement.

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Three PA contractors have been sentened to probation, home confinement and a combined $1.33 million in restitution for a 16-year DBE scheme they ran to win state bridge projects.

The defendants had pleaded guilty in October 2015 to conspiracy charges in the scheme that totaled nearly $19 million.

Noll was sentenced to three years’ probation and ordered by the court to pay $336,219 in restitution to Federal Highway Administration (FHWA), separate from the other three defendants. 

Dennis and Dale Weber were each sentenced to six months’ home confinement and five years’ probation. Weber Steel was placed on three years’ probation. The three defendants were ordered to jointly pay $1 million in restitution to the FHWA.

Fake DBE, Lucrative Projects

As reported earlier, over the course of the 16-year period, the Weber brothers took advantage of a fake DBE called Karen Construction Co. Inc., which they set up in order to win DBE lucrative bridge and highway subcontracts across Pennsylvania.

Karen Construction appeared to be owned by Noll, who served as president of the firm from January 2002 to October 2011.

In reality, Weber Steel and Karen Construction functioned as a single business run by Dennis and Dale Weber, president and vice president, respectively, of Weber Steel, a bridge and highway construction contractor.

Although the U.S. DOT construction contracts required Karen Construction to operate as an independent business under the DBE program, the two companies shared an office, equipment and employees.

The brothers admitted to setting up the DBE and concealing the fact that Dennis controlled Karen Construction and its sales, marketing, project selection and price estimating while Dale took responsibility for its purchasing, project supervision and hiring. They used false invoices to mask the transfer of profits from Karen Construction to Weber Steel to fund year-end bonuses.

Noll's role was preparing false reports, certifications, invoices and correspondence that represented Karen Construction to state and federal transportation officials as a legitimate DBE firm, authorities said.

From 1995 to 2011, Weber Steel was able to fraudulently obtain more than $18.7 million from 224 federally funded bridge projects through Karen Construction, authorities reported.

The investigation was conducted jointly between the Federal Bureau of Investigation and the U.S. Department of Labor, OIG.

   

Tagged categories: Bridges; Department of Transportation (DOT); Government contracts; Laws and litigation; North America; Program/Project Management; Roads/Highways

Comment from Tony Rangus, (2/19/2016, 10:01 AM)

You have got to love the good old US of A. Where else can you steal or by fraud, obtain $19,000,000 and not go to jail! Their lawyers were worth every penny they got paid. We beat up poor Martha Stewart and force her to serve time, and these lowlifes get house confinement. Fraud, it seems in the construction business, is quite lucrative.


Comment from edwin call, (2/19/2016, 11:25 AM)

Really - No Jail Time???


Comment from Mike Vargo, (2/22/2016, 10:29 AM)

$19,000,000 million gained and only $1.336,000.00 to pay back. Hope Wall Street doesn't see this. Better returns than the market by a long shot.


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