Chart Courtesy of ACFE Related Links: Construction Fraud Mirrors Worldwide Ethics Problem When Surety Fraud Goes Unpunished, Small Contractors Suffer Business fraud is nothing new, but it is more prevalent in construction than in many other industries due to the great number of entities involved in most projects, says certified fraud examiner Wayne Kalayjian, a senior manager with Deloitte Financial Advisory Services in Los Angeles.Fraud accounts for roughly 8% of U.S. GDP, according to the Association of Certified Fraud Examiners (ACFE). "So, if our GDP was about $16 trillion in 2012, then one could argue that fraud accounted for $1.3
Dept. of Veterans Affairs A Dept. of Veterans Affairs website shows William D. Montague prior to his indictment in 2013. After a former Dept. of Veteran's Affairs official in Ohio pleaded guilty last month to taking bribes over many years from an unnamed "integrated design firm" with several U.S. offices, the mystery remains about the identity of the firm.According to emails in the indictment, which was filed last year by federal prosecutors, the unnamed design firm was hoping to vault into the big time by using the official to help it fatten profits and win big VA contracts in western
Photo from AP Wide World Officials of Local 401 were indicted on charges that include arson at non-union projects. Related Links: Federal Charge: Violent Ironworkers' Local 401 Valued its 'THUGS' Trades Must Play Key Role To Keep Industry Competitive, Employers Tell Union Ironworkers Years of alleged intimidation by an ironworkers' union local in Philadelphia through site vandalism, violence and extortion targeting non-union contractors, workers and even the carpenters' union culminated in the arrest last month of 10 of the local's managers and members.They were indicted on U.S. racketeering, conspiracy and arson charges, while the parent union took over the local's
Like other big-city unions, ironworkers' Local 401 in Philadephia found its once-unchallenged hold on the city and its suburbs compromised as nonunion contractors increased their market share.In response, say federal prosecutors, the local's leaders carried out, over many years, a program of intimidation that stands out for its violence and audacity. According to a grand jury indictment opened in Philadelphia last week, business manager and local leader Joseph Dougherty and nine other officers and members regularly employed violence and threats to extort contractors, limit nonunion work and even keep union carpenters from performing work the local believed it should control.In a
An AECOM executive makes a presentation to win a construction management contract for sewer repairs in Miami-Dade County, as shown in in documents provided by rival CH2M Hill's attorney. The $1.6-billion Miami-Dade county sewer repair project has produced a steady flow of controversy as Florida public officials changed the rules for competitors for the prime contract, and the two finalists clashed over the accuracy of their stated qualifications.Where the sales work by the finalists ends, and unethical misrepresentation begins, is hard to tell at this point. Some of it concerns simple math that ought to be easy to agree on.After
A portion of the newsletter sent out by Steven Golia with the message about Scarborough bonds that was later retracted. Related Links: A Bold Individual Surety Claims Coal-Backed Bonds are Rock Solid Two days before Christmas, Arthur J. Gallagher & Co., the world's fourth-biggest insurance broker, announced one of the last of its 31 mergers and acquisitions of 2013: McIntyre Risk Management, a brokerage in Cherry Hill, N.J.Some time during December—whether it was before or after the acquisition isn't known—McIntyre apparently hired a key player in the world of individual surety, Steven Golia. He had been president of Charlottesville, Va.-based
Photo by AP/Wideworld Environmental groups claim Winter Olympic construction companies are inappropriately disposing waste around Sochi, despite Vladimir Putin's 'zero-waste' pledge to win the games. Related Links: Anti-Corruption Activist's Home Searched in Alleged Graft Case Sochi, a remote city on Russia's Black Sea coast, required a new highway and railroad to serve hundreds of thousands of guests for the 2014 Winter Olympics. These two projects alone cost as much as the entire construction budget of the 2010 Vancouver games, say event observers and activists."We compared the highway to similar projects in the developed world and found it to be 1.9
Related Links: Indictment Charging Document Atlanta Constitution: DeKalb School Exec Pope Gave Architecture Firms the Ax A state judge sentenced the former chief operating officer of the DeKalb County, Ga., school district and her ex-husband, an architect, for a scheme in which they steered district design work to his firm.County Superior Court Judge Cynthia Becker sentenced Patricia Reid and Tony Pope on Dec. 9, but more interesting than the sentences are how the husband-and-wife team worked together yet still believed they worked within the law or had concealed any violations. Becker sentenced Reid to 15 years in prison for steering district
Related Links: AIA Contract Documents References to 'Cost of Work' Robert E. Crawford, owner of a Springdale, Pa., construction company, is set to be sentenced on Dec. 13 in federal district court in Pittsburgh, after pleading guilty last summer to mail fraud in a kickback scheme with a developer financed though overbilling so-called "cost of work" charges on two building projects worth $15 million.U.S. District Court Judge David Cercone has also set for next March 3 the sentencing for the developer, Mark M. Palombaro, former vice president of development for Indianapolis-based Simon Property Group.Palombaro pleaded guilty on Nov. 3 to