Treasure Valley Building Contractor Pleads Guilty to Wire Fraud
Owner of Quality Tile Roofing, Inc. Agrees to Pay $150,000 in Restitution and Penalties
BOISE – U.S. Attorney Wendy J. Olson announced that Patrick J. Large, 62, of Meridian, Idaho, the owner of Quality Tile and Roofing, Inc., pleaded guilty yesterday to a superseding information charging him with one count of wire fraud. He also consented to a $150,000 forfeiture. According to court documents, Large orchestrated a scheme to defraud federal agencies by falsely representing that the company had two employees residing in a HUB Zone. The HUBZone Program encourages economic development in historically underutilized business zones through the establishment of preferences in federal contracting opportunities. Based upon this false representation, the government awarded a contract to a company controlled by Large that it was not otherwise entitled to receive.
Large faces up to 20 years in prison, a maximum fine of $250,000, and up to three years of supervised release. He is scheduled to be sentenced on January 8, 2013, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Boise.
“Contract fraud takes money out of the pocket of business owners who play by the rules,” said Olson. “As this plea signifies, the U.S. Attorney's Office, working with its federal agency partners, will aggressively pursue those who fraudulently obtain government contracts.”
According to the plea agreement, on July 27, 2005, Large submitted an application to the U.S. Small Business Administration (SBA) that represented that the principal place of business of McDonald Roofing and Construction, Inc. (MRC) was located in Emmett, Idaho, and that it had two employees at this location. Large made these representations in submissions to the government. By doing so, MRC was able to obtain a contract awarded by the government for qualified HUBZone entities. Large admitted that the representations were false because the business did not have at least two employees residing in the HUBZone. In June 2007, the United States Department of Interior (DO I) awarded a $218,241 contract to MRC for seismic mitigation work to be performed at the National Interagency Fire Center (NIFC) in Boise. DOl awarded MRC the contract on the basis that it was a HUBZone qualified entity. On December 21, 2007, MRC received a payment from the government of approximately $219,287.
In two related cases, Construction Service Corporation, Inc. (CSC) and McDonald Roofing and Construction, Inc., of Boise, were each sentenced in June 2012 to three years of probation. CSC was fined $65,000 for wire fraud and making a false statement to the government. McDonald Roofing and Construction was fined $5,000 for fraud related to government contracting.
According to court documents, CSC defrauded the United States Department of Agriculture on a $274,283 contract for roofing work to be performed at a research facility in Corvallis, Oregon. CSC admitted that it made false statements to the SBA concerning its eligibility for HUBZone contracts. CSC also pled guilty to defrauding the U.S. General Services Administration in relation to the Federal Surplus Property Program. As an entity qualified under the SBA's 8(a) program, CSC was eligible to acquire federal surplus equipment. The corporation admitted to transferring surplus property to an individual who was not eligible to acquire surplus property.
McDonald Roofing and Construction, Inc. pled guilty to defrauding the United States Department of Interior on a $218,241 contract for work to be performed at the National Interagency Fire Center (NIFC) in Boise, Idaho. According to court documents, McDonald Roofing Corporation admitted that it made false statements to the SBA concerning its eligibility for the contract.
“Mr. Large's fraud involved a SBA government contracting program that encourages economic development in historically underutilized business zones," said SBA Inspector General Peggy E. Gustafson. “This case highlights our resolve to protect the integrity of this important SBA program and identify and prosecute those companies that misrepresent themselves to claim eligibility for preference in federal contracting opportunities. We appreciate the work completed by our partner law enforcement agencies and the leadership of the U.S. Attorney's office in this case.”
“This is a great example of law enforcement agencies working together with the United States Attorney’s Office to bring those to justice who committed contract fraud,” said Lilia E. Ruiz, IRS Criminal Investigation Acting Special Agent in Charge for the State of Idaho.
The case was a joint investigation by the Office of Inspector General for the Department of Veterans Affairs, the U.S. Small Business Administration, General Services Administration, Department of Interior, Department of Agriculture, as well as the Defense Criminal Investigative Service, the U.S. Army Criminal Investigative Command, the Air Force Office of Special Investigation, and Internal Revenue Service-Criminal Investigation.
Today's announcement is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys' offices and state and local partners, it's the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Project Safe Neighborhoods (PSN) is a collaborative effort by federal, state, and local law enforcement agencies, prosecutors, and communities to prevent and deter gun violence.