You can read all about the federal jury verdict convicting Joseph W. Nagle, former CEO of Schuylkill Products Inc. in Pennsylvania, of conspiracy and tax fraud in relation to disadvantaged business enterprises. The jury in Harrisburg on April 5 found Nagle guilty of 26 of 30 charges in the federal indictment.
Federal prosecutors say the conviction brings a just conclusion to the biggest disadvantaged-business enterprise fraud in U.S. history. Several executives and employees of the company had already pled guilty to using another firm as a DBE front for 15 years.
Schuylkill Products and made concrete bridge beams and its subsidiary, CDS Engineers Inc., erected them in the field, mostly for highway overpasses. The companies were sold in 2009.
What people just tuning into the story may not know is how Nagle’s attorneys worked so hard to get his partner, Ernest G. Fink, to testify after Fink had pleaded guilty. Fink's lawyer insisted he had immunity from testifying.
Nagle’s defense was that although Fink, who is Nagle's uncle, and Nagle’s father, had operated the business together, Nagle didn’t become president and CEO until after Nagle's father had passed away in 2004. By that time the DBE conspiracy had been going on a long time and Nagle’s attorneys argued that he had been shut out of some company affairs and was unaware that the fraud was going on during the time he headed the company.
After the verdict, I asked Nagle’s attorney, Michael A. Schwartz, if as CEO Nagle had reported to the business for work every day. Schwartz said yes.
I wondered how something like this, both a dirty business and family secret, could have escaped Nagle’s attention during all that time. Possibly the jury wondered, too.
Nevertheless, Schwartz has already begun the appeal process.
But you wonder why the federal prosecutor and Fink tried so hard to keep him off the witness stand.
Eventually, after numerous legal maneuvers, Fink was forced to testify and invoked the Fifth Amendment against self-incrimination. The judge directed Fink to testify anyway, Schwartz put tough questions to him intended to show Fink had shut Nagle out of some company business, including the fraud, but the jury came back with a vote to convict Nagle anyway.
In another unusual twist, federal prosecutors used an ENR article and subscription as some of the evidence to prove the charges against Nagle.
According to federal prosecutor Bruce Brandler, when FBI agents searched Nagle’s office in October 2007, they found an article from ENR dated May 8th, 2006, with a headline stating that the U.S. DOT was cracking down on DBE contracting.
“That was one of the key pieces of evidence because he had seen this article in 2006,” said Brandler several days after the verdict.
Then I thought, you could be reading about mayhem in ENR and still not be participating in it at your own company.
But four other SPI executives and employees had already plead guilty to what, as Brandler pointed out, was a lot of criminal fraud.
“It was 15 years and pretty brazen conduct,” he said.