News and Press Releases

U.S. Attorney’s Office Collects $19.4 Million Fine in Jefferson County Sewer Corruption Case

January 6, 2012

BIRMINGHAM – United States Attorney Joyce White Vance announced today that Roland Pugh Construction Company, convicted in 2006 on federal charges of mail fraud and bribery of Jefferson County officials in connection with the sewer project, has finally paid almost $20 million in fines and court fees ordered at the time of the conviction.

Pugh filed for bankruptcy in December 2006, shortly after its conviction. The bankruptcy proceedings interrupted the government’s ability to collect the fine from Pugh. Repeated appeals called into question the finality of the convictions, further preventing collection of the fine. The proceedings in bankruptcy would likely have had the effect of dissipating funds over the years, as Pugh took repeated appeals of its conviction and the fine amount, so that ultimately, the company would not have had remaining assets to pay the fine.

However, Assistant United States Attorney Richard O’Neal, who handles much of the office’s bankruptcy work, had the foresight and perseverance to come up with a plan that preserved the government’s ability to collect the fine almost six years later. In September 2011, the U.S. Eleventh Circuit Court of Appeals upheld the U.S. District Court conviction and final judgment in the criminal case. In December 2011, the U.S. Attorney’s Office obtained a court order in the bankruptcy directing that Roland Pugh Construction Inc. pay $19,400,00 in fines and $9,200 in court fees, as ordered at the time of its 2006 conviction for corruption in Jefferson County’s sewer system rehabilitation project.

On Dec. 19, $19,409,200 was collected by the U.S. Attorney’s Office and paid to the District Court Clerk’s Office, Vance said. “Thanks to the diligent and innovative work done by Assistant United States Attorney Richard O’Neal, Roland Pugh Construction Inc. has finally had to pay this significant fine, for conduct associated with the sewer corruption that led to Jefferson County’s Bankruptcy. Richard’s commitment, along with that of the other members of my office’s Financial Litigation Unit, is exemplary,” Vance said. She noted that in just the first three months of this fiscal year, her office collected almost twice its annual budget and returned it to the U.S. Treasury.

In April 2008, the company paid $239,652 in restitution to Jefferson County, as specified in its plea agreement with the government.

The $19.4 million fine from Pugh Construction will be paid into the Justice Department’s Crime Victims Fund, which disperses funds to states to pay for programs that offer assistance to crime victims. Money from the fund is distributed through a competitive grant process to programs in county district attorney offices, domestic violence and rape centers, and child abuse treatment centers.

The U.S. Attorney’s Office has collected more than $30 million in fines, fees and restitution from the 17 individuals and five companies convicted in the federal criminal probe into the county’s sewer construction and repair project and its refinancing of debt for the sewer program.



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