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Contractor Pleads Guilty in ME Bridge Case

Thursday, August 5, 2021

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According to a release issued by the District of Maine’s Department of Justice, Acting U.S. Attorney Donald E. Clark has recently announced that a man from Sidney has pleaded guilty in federal court for making false statements on a federally funded bridge project.

Jim Wentworth was reportedly working as the project manager for a general contractor on a bridge contract in Gardiner, Maine, in June 2019, when he submitted documents falsely inflating the costs paid to a subcontractor. The changes were a part of a contract modification.

Based on the false submissions, the Maine Department of Transportation overpaid the general contract by more than $91,000. The project was reportedly being funded in part with federal highway funds approved by the U.S. Department of Transportation.

Marilyn Nieves / Getty Images

According to a release issued by the District of Maine’s Department of Justice, Acting U.S. Attorney Donald E. Clark has recently announced that a man from Sidney has pleaded guilty in federal court for making false statements on a federally funded bridge project.

In pleading guilty, Wentworth faces up to five years in prison and a fine of up to $250,000. In addition, Wentworth could also face up to three years of supervised release.

Wentworth is slated to be sentenced following the completion of a presentence investigation report by the U.S. Probation Office. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The investigation was conducted by the U.S. Department of Transportation, Office of Inspector General.

Recent Fraud Cases, Prevention

Last month, in Oregon, two men were charged after pleading guilty to their role in a scheme to steal funds from the Small Business Administration’s Paycheck Protection Program.

On May 1, 2020, Russell Anthony Schort, 39, of Myrtle Creek, Oregon, and his accomplice Andrew Aaron Lloyd, 51, of Lebanon, Oregon, submitted a PPP loan application under Schort’s business name, Schort Lee Construction, to U.S. Bank. The loan application included a false IRS form 944 listing 2019 wages paid of more than $3 million and a fake list of 56 employees and the wages reportedly paid to them as well.

Under false representations, U.S. Bank processed the loan and disbursed more than $600,000 into Schort’s bank account. Three days after the transaction, Schort transferred $307,000 to Lloyd’s bank account, who used the funds to purchase securities through an online brokerage account.

According to reports, however, the construction business front was just one of several applications Lloyd engineered starting in April 2020, having also utilized personally identifiable information of relatives and business associates without their consent, in addition to false business profiles.

In total, Lloyd submitted nine PPP loan applications, six of which were accepted, resulting in a payout of more than $3.4 million. Lloyd also applied for numerous Economic Injury Disaster Loans, of which one was accepted, resulting in an additional $160,000 in payments to Lloyd.

Lloyd then reportedly spent the funds received to purchase real estate and invest in various securities (which increased in value), with more than $1.8 million transferred to his E*TRADE Securities brokerage account.

In January, agents seized Lloyd's brokerage account, which included 15,740 shares of Tesla, Inc. In March, agents seized another account containing more than $660,000 in securities and cash. In total, the securities and cash seized from Lloyd's multiple accounts were valued at more than $11 million.

The U.S. Attorney's Office reported that Llyod has since accepted responsibility for his actions and was recommended a sentence of 61 months in federal prison. Llyod has also agreed to pay more than $3.6 million in restitution and to forfeit more than $11 million in cash and securities and 23 properties that were purchased with PPP funds.

On June 17, Lloyd pleaded guilty to bank fraud, money laundering and aggravated identity theft. His sentencing is slated for Sept. 9, before U.S. District Court Judge Michael J. McShane.

On Jan. 5, Schort was charged by criminal complaint with wire fraud, bank fraud and money laundering. On June 8, he was charged by superseding criminal information with bank fraud.

Schort faces a maximum sentence of 30 years in prison, a $1 million fine and five years of supervised release. As part of his plea agreement, Schort has also agreed to pay no less than $294,552 in restitution to the U.S. Treasury.

He will be sentenced on Oct. 21, also before McShane.

This case was investigated by the FBI with assistance from the SBA Office of Inspector General and IRS Criminal Investigation. It is being prosecuted by Gavin W. Bruce, Assistant U.S. Attorney for the District of Oregon.

A few months prior to the case, in April, Pittsburgh Mayor Bill Peduto signed an executive order aiming to cut down on construction fraud, promote worker safety and protect city tax revenue.

According to his office, the Construction Fraud Executive Order “will combat illicit efforts by fraudulent construction companies to commit tax, insurance and workers’ compensation fraud to maximize their profits; use subcontractors or labor brokers to screen themselves from responsibility; pay workers in cash to avoid taxes; and decrease their labor costs.”

The EO follows a lengthy study by the Joint Task Force on Construction Industry Fraud, which was created in December 2018. The group gave its recommendations in March. The task force’s findings, meanwhile, reportedly found several subcontractors who were paying in cash or check without deductions on multiple multi-million dollar job sites.

   

Tagged categories: Bridges; Bridges; Contractors; Ethics; Fraud; Government; Government contracts; Managers; NA; North America; Program/Project Management; Project Management; Roads/Highways; Subcontractors

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