Engineering Firm And Its Former Executive Indicted On Antitrust And Fraud Charges
North Carolina Department of Transportation Targeted in Decade-Long Scheme
A federal grand jury in Raleigh, North Carolina returned an indictment charging Contech Engineered Solutions LLC and Brent Brewbaker, a former executive at the company, for participating in long-standing conspiracies to rig bids and defraud the North Carolina Department of Transportation (NC DOT), the Department of Justice announced.
According to the six-count indictment filed in the U.S. District Court for the Eastern District of North Carolina, Contech and Brewbaker conspired to rig bids for aluminum structure projects funded by the United States and North Carolina Department of Transportation for nearly a decade. These aluminum structure projects included headwalls and other structures that facilitate drainage underneath or around paved roads, bridges, and overpasses. Contech and Brewbaker were also charged with defrauding the NC DOT by submitting bids that were falsely held out to be competitive and free of collusion, and using the U.S. Postal Service and email to carry out their scheme.
“The Antitrust Division continues to redouble our efforts to detect and prosecute those who cheat and steal from taxpayers through collusion and fraud in government procurement,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “The division will work with all of our law enforcement partners to ensure that the individuals and corporations that defraud government programs are held fully responsible for their actions and pay for the harm they cause.”
“Federal laws prohibiting bid rigging and collusion in the award of government contracts are designed to protect the taxpayers and to ensure that they get the best quality service at the most competitive pricing,” said U.S. Attorney Robert J. Higdon Jr. for the Eastern District of North Carolina. “Here, the defendants are accused of having conspired to violate those laws and to deprive the people of North Carolina of both the best service and the best pricing. Prosecution of these types of cases is critical to ensuring fairness and integrity in our public contract bidding system.”
“Activities related to collusion, bid rigging, and market allocation do not promote an environment conducive to open competition which harms the consumer,” said Director Steven Stuller, U.S. Postal Service (USPS) Office of Inspector General. “The USPS spends hundreds of millions of dollars on new construction, maintenance, and renovation of USPS facilities. Along with the Department of Justice and our federal law enforcement partners, the USPS Office of Inspector General will aggressively investigate those who would engage in this type of harmful conduct.”
“Today’s indictment sends a clear message to those who engage in bid rigging and other criminal conduct that such actions will not be tolerated,” stated Jamie Mazzone, regional Special Agent-in-Charge of the United States Department of Transportation Office of Inspector General. “We remain steadfast in our commitment to working with our prosecutorial and law enforcement partners to protect the taxpayers’ investment in our nation’s transportation infrastructure from fraud, waste, and abuse.”
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.
The offense charged in Count One carries a statutory maximum penalty of 10 years in prison and a $1 million fine for individuals, and a criminal fine of $100 million for corporations. The offenses charged in Counts Two, Three, Four, Five, and Six each carry a statutory maximum penalty of 20 years in prison and $250,000 fines, and a criminal fine of $500,000 for organizations. The maximum fines for each count may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than the statutory maximum fine.
This case is the result of an ongoing federal antitrust investigation into bid rigging and other criminal conduct in the aluminum structures industry, which is being conducted by the Antitrust Division with the assistance of the USPS Inspector General, the U.S. Department of Transportation Office on Inspector General, and the U.S. Attorney’s Office for the Eastern District of North Carolina.
In November 2019, the Department of Justice created the Procurement Collusion Strike Force, a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact government procurement, grant, and program funding at all levels of government — federal, state, and local. To contact the Procurement Collusion Strike Force, or to report information on market allocation, price fixing, bid rigging, and other anticompetitive conduct related to the aluminum structures industry, go to https://www.justice.gov/procurement-collusion-strike-force.