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Justice News

Department of Justice
U.S. Attorney’s Office
Middle District of Pennsylvania

FOR IMMEDIATE RELEASE
Thursday, October 20, 2016

Former United States Navy Contractor Sentenced On False Statement Charges

HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that a former U.S. Navy Contractor, Andrew Persaud, age 44, of North Potomac, Maryland, was sentenced today by United States District Court Judge Sylvia H. Rambo in Harrisburg to 21 months’ incarceration in connection with making a false statement to the government in connection with a $4.4 million contract to renovate warehouses at the Naval Support Facility in Mechanicsburg, PA.

According to United States Attorney Bruce D. Brandler, Persaud was indicted in October 2015 and charged with three counts of false statements to the Government and three counts of wire fraud.  On February 23, 2016, Persaud pled guilty to one count of false statements before Judge Rambo.

Persaud was the President and Corporate Director of Persaud Companies, Inc., a Virginia and Maryland based construction company that entered into a $4.4 million contract in 2011 to renovate several warehouses at the Naval Support Activity (NSA) facility in Mechanicsburg. 

Persaud hired approximately 17 sub-contractors to work on the project which began in May of 2012.             In June and July of 2012, Persaud submitted invoices to the Navy for progress payments.  In the documents, Persaud attached signed certifications verifying that all of his subcontractors had been paid for their work. Relying on the verity of Persaud’s representations, the Navy paid Persaud $1,206,470 between June and August 2012.

However, by September 2012, most of the subcontractors had walked off the job site and the Navy terminated Persaud’s contract after it learned, contrary to Persaud’s certifications, that none of the subcontractors had received payment for their work on the project.

The Navy had required Persaud to purchase a materials/labor bond prior to his first contract draw, the premium for which cost Persuad $53,539.  As a result, the subcontractors filed claims and eventually received payments from the bond carrier for their work totaling $1,281,753.

Under the terms of a plea agreement with the government Persaud agreed that the loss suffered by the victims was $1,206,470. 

Judge Rambo ordered Persaud to pay restitution in the amount of $1,206,470 and entered a forfeiture against him in that same amount.  Persaud was ordered to report to the Bureau of Prisons on November 21, 2016.

The case was investigated by the U.S. Naval Criminal Investigative Service and the Defense Criminal Investigative Service.  The case was prosecuted by Assistant United States Attorney Kim Douglas Daniel.

           

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Updated October 20, 2016