Grand Jury indicts former Chief Operating Officer of major St. Louis Construction Company in Minority Business Enterprise fraud scheme
ST. LOUIS – A federal grand jury indicted Brian Kowert, Sr., former Chief Operating Officer of the HBD Construction Company, on March 30, 2022, for five counts of wire fraud relative to his falsifying of Minority Business Enterprise (“MBE”) participation on several construction and redevelopment projects from 2014 through 2022.
Kowert, Sr. was an owner, executive vice president, and chief operating officer of HBD Construction Company. Kowert, Sr. was also the project manager on numerous HBD construction and redevelopment projects in St. Louis and throughout the Midwest region. The indictment alleges that beginning during 2014, and continuing through early 2022, Kowert, Sr. engaged in a scheme to defraud the City of St. Louis, the State of Missouri, and several HBD client companies by falsifying records to inflate MBE participation numbers on HBD projects. The MBE participation requirements on those projects sought to address historical social and economic disadvantages experienced by minority group members to reduce minority-based barriers to and foster participation by minority owned businesses.
The indictment alleges that Kowert, Sr. used actual MBE certified companies simply as “front” companies to pass payments to non-MBE certified companies which had actually provided the labor and materials on the projects. The MBE certified companies neither performed work nor provided materials on the projects and had no actual contact with the non-MBE companies which actually performed the work and provided the materials. The MBE certified companies were paid a nominal fee by Kowert, Sr. for acting as a “pass through” for the funds paid to the non-MBE companies. The indictment alleges that Kowert, Sr. provided false information and false reports to the City of St. Louis, the State of Missouri, and several HBD client companies which falsely inflated the actual MBE participation numbers on three separate projects. Those projects were located in the St. Louis and Kansas City metropolitan areas. The indictment alleges that Kowert, Sr.’s scheme and false representations were an effort by him to meet City of St. Louis, State of Missouri, and HBD client company MBE participation requirements and goals. Kowert, Sr. falsely reported hundreds of thousands of dollars as MBE certified work on the projects when, in fact, the work had been performed by non-MBE majority owned and staffed companies.
The HBD client companies, the State of Missouri, and the City of St. Louis had no knowledge of Kowert’s alleged criminal conduct, and fully cooperated with federal law enforcement in this investigation.
Charges set forth in the indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
The case was investigated by the Federal Bureau of Investigation. The case is being handled by Assistant United States Attorney Hal Goldsmith.