United States Attorney Announces Selection of Monitor in Miron Case and Describes Remedial Reasons and Purposes for Monitoring
United States Attorney James L. Santelle announced today that Stephen C. VanderBloemen, CPA, CFF, has been selected as the monitor who will oversee Miron Construction Company, Inc. as required by the Non-Prosecution Agreement (NPA) between Miron and the United States of America. The Non-Prosecution Agreement, pursuant to which Miron made a $ 4 million dollar payment to the United States of America, was announced on April 16, 2014. Mr. VanderBloemen’s work as the monitor on Miron is expected to begin immediately.
Mr. VanderBloemen is the managing partner of The VanderBloemen Group. He has more than 43 years of experience in public accounting, including 41 years serving primarily construction contractors, construction suppliers, credit grantors to contractors (sureties and bankers), and construction industry associations. His group, the VanderBloemen Group CPAs & CFFs (TVG), has earned a national reputation for excellence and operates from offices located in Waukesha, Mayville, Fond du Lac, and Juneau, Wisconsin. TVG provides a wide range of services to contractors, including assistance with project estimating, contract management, project compliance, monitoring, and accounting.
Mr. VanderBloemen is a graduate of Concordia College, attended graduate school at Marquette University, and has shared his expertise through the teaching of others at the Milwaukee School of Engineering, focusing on that academic institution’s Construction Management Degree Program. Mr. VanderBloemen also devotes more than 100 hours of his time each year to construction industry-related training courses through organizations like the Associated General Contractors (AGC) of America. He is a published author in multiple journals and the co-author of the AGC of America’s “Construction Estimating & Bidding - Theory, Principles, Process” (Text Book 1st and 2nd Editions). Mr. VanderBloemen has also been a featured speaker at National AGC events.
In announcing Mr. VanderBloemen’s appointment, United States Attorney Santelle addressed the reasons why the United States Department of Justice required a monitor in this case. Specifically, United States Attorney Santelle explained that a criminal investigation, led by the Federal Bureau of Investigation, revealed that Miron had been obtaining funds from school districts by intentionally inflating the wages Miron allegedly had paid its employees. United States Attorney Santelle stated further that an in-depth analysis of five particular school district projects and a random sampling from a pool of approximately 150 total school projects showed clearly that, when Miron billed school districts for “actual wages paid,” contrary to the express language and terms of its contracts, Miron systematically and intentionally added not only overhead costs but also a hidden profit “multiplier” totaling up to an additional 45%. United States Attorney Santelle explained that the remedial work of the appointed monitor would help to ensure that Miron ceased its practice of intentionally overbilling school districts in this manner.
United States Attorney Santelle added that the monitor would also be responsible for helping to ensure that Miron would no longer engage in “cost smoothing.” In this regard, United States Attorney Santelle explained that the criminal investigation revealed that Miron routinely transferred costs from less profitable projects to unrelated projects that could absorb the additional costs and still appear to be profitable. The result of this conduct was that all of Miron’s projects appeared profitable to outsiders. As revealed by the investigation, this “cost smoothing” also allowed Miron to close the discrepancies in its accounting records that were caused by Miron’s inflation of labor costs in its bills to public school districts. Without “cost smoothing,” Miron’s financial statements on the school projects could not be reconciled with its inflated school district billings, Santelle explained.
Finally, United States Attorney Santelle confirmed that Miron recently paid the United States the $ 4 million sum required by the NPA and that the United States is in the process of distributing that money to the five school districts identified in that agreement.