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WI Company Charged with $200M in Fraud

Tuesday, April 17, 2018

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Owner of Wisconsin-based contractor Sonag Company Inc. Brian Ganos was recently indicted by the state’s grand jury for 22 counts of fraud, reportedly creating fake minority and veteran-owned businesses to win several million in federal contracts.

Under Sonag, Ganos won more than $200 million in federal contracts normally set aside for those protected groups, noted the Milwaukee Journal Sentinel.

Sonag Indictment

The key to the operation, which ran for 12 years, was in establishing operating construction companies with “straw owners,” individuals who qualified as a disadvantaged or former military personnel injured during service. These individuals did not control the businesses, however, and have not been charged.

From there, those responsible allegedly obtained small business certifications to win the set-aside government-funded contracts.

© iStock.com /  serggn

Owner of Wisconsin-based contractor Sonag Company Inc. Brian Ganos was recently indicted by the state’s grand jury for 22 counts of fraud, reportedly creating minority and veteran-owned businesses to win several million in federal contracts.

Nuvo Construction Company was established as one of the companies operated by a “straw man” director, who was chosen to qualify the firm as a small disadvantaged business and as a disadvantaged business enterprise. This director worked for a different company in Minnesota, and did not control Nuvo.

The other two companies named include C3T and Pagasa Construction Company, which are both housed in the same headquarters as Sonag. These same headquarters were also the targets of the most recent seizure by the government.

Sonag accountant Mark Spindler has also been named in the case. Nicholas Rivecca, president of Sonag Ready Mix, has also plead guilty to conspiring to defraud the U.S. government in a separate but related case.

In light of the indictments, prosecutors have seized a Corvette Stingray, three houses and more than $2.2 million from two bank accounts.

If convicted, Ganos and other parties will face a maximum of 20 years in prison for each wire- and mail-fraud related charge, forfeiture of criminal proceeds and a $250,000 fine.

Previously, Sonag and its subsidiaries were involved in some of Milwaukee's largest construction projects, including the arena that will house the Milwaukee Bucks. Ganos himself qualified as a minority business owner of Sonag from 1994 to 2003, after which he graduated from the program and was no longer eligible for the set-aside contracts.

   

Tagged categories: Construction; Contractors; Criminal acts; Good Technical Practice; Government; Government contracts; North America

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