Idaho Diesel Parts Companies and Owner Agree to Pay $1 Million After Pleading Guilty to Selling and Installing Illegal Defeat Devices
Owner of Quality Tile and Roofing, Inc. Agrees to Forfeit $150,000; also Fined $20,000
BOISE – Patrick J. Large, 62, of Meridian, Idaho, the owner of Quality Tile and Roofing, Inc., was sentenced yesterday in federal court to two years’ probation and ordered to pay a $20,000 fine, U.S. Attorney Wendy J. Olson announced. Large pleaded guilty on September 18, 2012, to a superseding information charging him with one count of wire fraud. Chief U.S. District Judge B. Lynn Winmill ordered Large to serve eight months of his probation sentence on home detention, perform 80 hours of community service, and forfeit $150,000.
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.
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 related cases, Construction Service Corporation, Inc. (CSC) and McDonald Roofing and Construction, Inc., of Boise, were sentenced last year to three years’ probation. CSC was fined $65,000 for wire fraud and making a false statement. McDonald Roofing and Construction was fined $5,000 for fraud related to government contracting.
“The successful investigation and prosecution of Mr. Large, CSC, and McDonald Roofing and Construction, Inc., are excellent examples of the cooperative working relationship between the U.S. Attorney’s Office and its federal agency partners,” said Olson. “We will continue to work together to ensure those who fraudulently obtain government contracts will not go unpunished.”
“The consequence to those who misrepresent themselves to claim eligibility for preference in federal contracting opportunities is evident by today’s announcement,” said SBA Inspector General Peggy E. Gustafson. “Mr. Large's fraud involved a SBA government contracting program that encourages economic development in historically underutilized business zones, and I am pleased that he has accepted responsibility for his actions. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their commitment to seek justice on behalf of the American taxpayer.”
“Rest assured those who find ways to fraudulently benefit from government programs will be brought to justice,” said Lilia E. Ruiz, IRS Criminal Investigation Acting Special Agent in Charge for the State of Idaho. “IRS Criminal Investigation will work diligently with our law enforcement partners to combat such fraud.”
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.