Insulation Contracting Firm and Co-Owner Plead Guilty to Antitrust and Fraud Charges
Langan Insulation LLC and its co-owner pleaded guilty today in Bridgeport, Connecticut, for their roles in schemes to rig bids in violation of the antitrust laws and engage in criminal fraud on insulation contracts, bringing the total to five convictions in this ongoing investigation, the Department of Justice announced.
According to court documents, from October 2011 until March 2018, Langan Insulation LLC, located in North Haven, Connecticut, and Thomas F. Langan, of East Haven, Connecticut, conspired with other insulation contractors to rig bids and engage in fraud on contracts for installing insulation around pipes and ducts on construction projects at universities, hospitals, and other public and private entities in Connecticut. The conspirators discussed prices and agreed on bids that inflated prices to their customers by approximately 10 percent. In order to conceal their actions, the conspirators perpetrated the bid-rigging and fraud schemes using phones for which the registration masked the identity of the users and an encrypted disappearing messaging app.
“Today’s two guilty pleas, from a company and its senior executive, underscore our ongoing efforts to hold companies and individuals accountable for engaging in bid rigging and fraud,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “We will aggressively pursue and hold accountable those individuals and entities who inflict millions of dollars in harm, particularly on vulnerable institutions, such as taxpayer-funded schools and hospitals, and other businesses.”
“This collusive scheme defrauded hospitals, universities and businesses across New England of millions of dollars,” said U.S. Attorney John H. Durham for the District of Connecticut. “The guilty pleas today demonstrate that the Department of Justice will seek to hold both individuals and companies accountable for rigging bids. I thank the FBI, DCIS, and the Antitrust Division for their ongoing efforts to bring the participants in this conspiracy to justice.”
“Today is another example to show that individuals who engage in fraud schemes of any kind will not be tolerated,” said Special Agent in Charge Brian C. Turner of FBI’s New Haven Field Office. “The FBI, along with DOJ and our law enforcement partners, will remain diligent in combatting fraud and collusion so that justice is served.”
“Bid rigging and other violations of antitrust laws seriously damage the integrity of the U.S. Defense Department's procurement process,” said Special Agent in Charge Leigh-Alistair Barzey of the Department of Defense OIG’s Defense Criminal Investigative Service (DCIS), Northeast Field Office. “The guilty pleas announced today are the direct result of a joint investigative effort and demonstrate the DCIS’ ongoing commitment to work with the USAO-CT and the FBI to investigate and prosecute individuals and companies that engage in criminal conduct that undermines the competitive bidding process.”
The antitrust charge announced today carries a maximum penalty of 10 years in prison and a criminal fine of $1 million for individuals, and a criminal fine of $100 million for corporations. The fraud conspiracy charge carries a maximum penalty of 20 years in prison and a criminal fine of $250,000 for individuals, and a criminal fine of $500,000 for organizations. The fines for the antitrust and fraud conspiracy charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. In addition to their guilty pleas, Langan Insulation LLC and Thomas F. Langan have agreed to pay restitution to the victims.
The ongoing investigation is being conducted by the Antitrust Division’s New York Office, the U.S. Attorney’s Office for the District of Connecticut, the FBI’s New Haven Division, and the Defense Criminal Investigative Service. Anyone with information in connection with this investigation is urged to call the Antitrust Division’s New York Office at 212-335-8000, or visit http://www.justice.gov/atr/contact/newcase.html.