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PA Bridge Contractor Sentenced in DBE Fraud

Wednesday, February 28, 2018

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Watson Maloy, president of West Mifflin Construction Co. Inc., a formerly certified Disadvantaged Business Enterprise, was sentenced to probation last week on charges of allowing WMCC to be used as part of a pass-through scheme to defraud the associated federal minority set-aside program on bridge projects in Pennsylvania.

Maloy, 77, was sentenced on Feb. 20 by U.S. District Judge Joy Flowers Conti with a two-year probationary period and fined $1,000.

Case History

According to the Pittsburgh Post-Gazette, from 2012-14, WMCC had 13 set-aside contracts with Century Steel Erectors Co. (Dravosburg, Pennsylvania). In 2012 and 2013, Maloy and associates employed by CSE agreed to use WMCC as a front to acquire profits from contracts intended for DBE firms.

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Maloy, 77, was sentenced on Feb. 20 by U.S. District Judge Joy Flowers Conti with a two-year probationary period and fined $1,000.

CSE staff, not those working for WMCC, were responsible for negotiating, coordinating, performing and otherwise managing the DBE subcontracts. As a result, CSE performed all DBE work, which included negotiating crane rentals, ordering supplies and materials, and recruiting union workers.

To make this arrangement work, CSE personnel used WMCC letterhead and email accounts, while also possessing company business cards and placards that covered up CSE logos on certain vehicles. CSE was also the company to do all of the work on bridge projects; WMCC did none.

Century Steel Plea

Donald Taylor, the owner of the Dravosburg-based company, has pleaded guilty to conspiracy against the U.S., and will be sentenced next month. Taylor also admitted that both he and Maloy had fraudulently acquired nine bridge work contracts from PennDOT. WMMC received $1.06 million from these, while Taylor paid Maloy himself a periodic fee (in the $2,000 to $10,000 range) for his cooperation.

Taylor and Maloy were ordered to pay $85,000 in restitution to PennDOT.

The invesigtation was conducted by the Office of the Inspector General and U.S. Department of Transportation, along with the FBI and the Pennsylvania Turnpike Commission OIG.


Tagged categories: Fraud; Government; Government contracts; Infrastructure; NA; North America; Program/Project Management

Comment from Evens Prophete, (4/7/2018, 9:08 PM)

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