HARRISBURG- The United States Attorney’s Office for the Middle District of Pennsylvania announced that a federal Grand Jury in Harrisburg has indicted Andrew Manganas, and Panthera Painting, Inc., on embezzlement, fraud, false statements, and environmental charges related to a subcontract performed as part of a $42 million rehabilitation project administered by the Pennsylvania Department of Transportation (PennDot).
According to United States Attorney Peter Smith, Manganas, age 59, is a resident of Canonsburg, Washington County, Pennsylvania, and his company, Panthera Painting, Inc., is also headquartered in Canonsburg.
In September 2009, PennDOT awarded a contract for rehabilitation work on the George Wade Bridge to J.D. Eckman, Inc. (Eckman), as the prime contractor.
The George Wade Bridge spans the Susquehanna River on Interstate 81 in Cumberland and Dauphin Counties, Pennsylvania. The Federal Highway Administration (FHWA) of the U.S. Department of Transportation conducted reviews and approvals during the project’s design and construction phases. The contract amount was $42,480,434 with the FHWA’s federal-aid programs reimbursing 90 percent of that cost. In October 2009, Panthera was awarded a $9,875,000 subcontract by Eckman. The subcontract covered the blasting, resurfacing, and painting of the structural steel on the George Wade Bridge. The subcontract amount ultimately rose to approximately $10 million.
The Embezzlement, False Statement and Fraud Charges
The federal oversight and funding of the contract required each contractor and subcontractor to submit Certified Payroll Reports for every worker and every pay period to certify that the appropriate federally established prevailing wage was being paid to each worker.
Manganas and Panthera allegedly embezzled money from benefit and pension plans by engaging in a “side payroll” scheme through which workers on the George Wade Bridge Project received two checks, one for regular hours and a separate “per diem” check. The “per diem” checks allegedly were for overtime hours worked and did not include required contributions to the workers’ union welfare benefit and individual employee’s pension plans. The Indictment alleges that approximately $400,000 was embezzled from union benefit and workers’ pension plans by Manganas and Panthera between 2011 and 2013.
The Indictment also charges the defendants with 21 separate counts of making and using false statements in a matter within the jurisdiction of the FHWA by causing false certified payroll reports relating to workers on the George Wade Bridge project to be submitted to the agency between 2011 and 2013. The defendants are also charged with 21 counts of wire fraud by causing the FHWA to wire payments from the Federal Highway Trust Fund to the Commonwealth of Pennsylvania which included payments for work performed by the defendants. The alleged loss of wages of workers Panthera used on the project was approximately $208,879, as a result of the failure to pay the federally established prevailing wages
The Indictment charges that the defendants knowingly caused discharges of pollutants into the Susquehanna River during and connected with work on the George Wade Bridge project. The Federal Clean Water Act and its regulations, and the project’s contract, prohibit the discharge of pollutants without a permit. Panthera and Manganas were supposed to use methods to ensure that pollutants did not enter the Susquehanna River, including construction of “containment” to cover bridge areas being blasted clean and repainted, using ropes, cables, fabric, metal pans and waste collection and recycling systems on segments of the bridge being blasted and repainted to prevent pollutants from being discharged into the River.
The Indictment alleges that between 2011 and 2013, Panthera workers, at the direction of and with the knowledge of defendant Manganas, in fact used a variety of methods and equipment to discharge pollutants, including abrasive paint blasting materials, waste paint, and metal, into the Susquehanna River, rather than collect them for recycling or disposal as hazardous waste. These techniques allegedly included, blasting paint off metal pieces outside areas in which the workers had set up containment to capture waste material (open blasting), using air hoses connected to blasting equipment to blow debris off bridge components into the River, setting up containment in which the fabric had holes, having workers poke holes in containment to let wastes discharge into the River, pushing waste off the side of the bridge, and tipping over metal pans used to collect paint waste, all without a permit to do so.
“Businesses receiving federal funds have an obligation to do honest, transparent work in return,” said FBI Special Agent in Charge William F. Sweeney Jr. “Anything less is a violation of public trust and a waste of taxpayers’ money. The FBI will continue its work to ensure that fraudsters are thoroughly investigated and brought to justice.”
“The indictment handed down today against Andrew Manganas, owner of Panthera Painting Company, Inc., on charges including wire fraud and false statements demonstrates the strong commitment of the Department of Transportation and the Office of Inspector General to ensuring the integrity of the Federal-aid Highway Program,” said Douglas Shoemaker, U.S. DOT OIG regional Special Agent-in-Charge. “Working with our law enforcement and prosecutorial colleagues, we will continue to protect the taxpayers’ investment in our Nation’s infrastructure from fraud, waste, abuse and violations of law.”
“Unpermitted discharges of pollution threaten our lakes, rivers and streams and can pose serious risks to public health and our communities,” said Jennifer Lynn, Assistant Special Agent in Charge of EPA's criminal enforcement program in the Middle Atlantic States. “Today’s indictment demonstrates that EPA and its partner agencies will aggressively investigate and prosecute actions that put our waterways at risk.”
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This matter was investigated by the U.S. Department of Labor, Office of Inspector General; the U.S. Department of Transportation, Office of Inspector General; the U.S. Environmental Protection Agency, Criminal Investigation Division; and the Federal Bureau of Investigation. Prosecution is assigned to Assistant U.S. Attorney James T. Clancy and Special Assistant U.S. Attorney Martin Harrell of the EPA Region 3 Office in Philadelphia.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The embezzlement offense carries a maximum penalty of up to 5 years in prison and a $250,000 fine; the false statement charges each carry a maximum penalty of up to 5 years in prison and a $250,000 fine; the wire fraud charges each carry a maximum penalty of up to 20 years in prison and a $250,000 fine; the Clean Water Act charges each carry a maximum penalty of up to 3 years in prison, and a fine of up to $50,000 per day of violation, a term of supervised release following imprisonment, and a fine.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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