Former U.S. Navy Contractor Pleads Guilty To False Statement Charges
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a former Navy Contractor has pleaded guilty to submitting a False Statement to the government in connection with $4.4 million contract to renovate warehouses at the Naval Support Facility in Mechanicsburg, PA .
According to United States Attorney Peter Smith, Andrew Persuad, age 43, of Mt Holly Springs, Pennsylvania, was indicted in October 2015. Persuad pleaded guilty to one count of false statements before Senior U.S. District Court Judge Sylvia Rambo.
The Indictment alleged that Persaud was the President and Corporate Director of Persuad Companies, Inc., a Virginia and Maryland based construction company that entered into a $4.4 million contract in 2011 to renovate warehouses at the Naval Support Activity (NSA) facility in Mechanicsburg.
Persuad hired approximately 17 sub-contractors to work on the project which began in May of 2012. In June and July of 2012 Persuad submitted invoices to the Navy for progress payments. In the documents Persuad attached signed Certifications stating that all of his subcontractors had been paid for their work. Relying on Persuad’s representations, the Navy paid Persaud $1,206,470 between June and August of 2012.
However, by September of 2012 most of the subcontractors had walked off the job site and the Navy terminated Persaud’s contract after it learned, contrary to Persuad’s Certifications, that none of the subcontractors had received any payment for their work on the project.
The Navy had required Persuad 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 has agreed that the loss suffered by the victims in the case is $1,206,470. Persaud has also agreed to make restitution in this amount and has agreed to forfeit the sum of $1,206,470.
The offense is punishable by a maximum of 5 years imprisonment and a $250,000 fine. No date has been set as yet for sentencing.
The case was investigated by the Inspector General’s Offices of the U.S. Navy and Department of Defense, and is being prosecuted by Assistant U.S. Attorney Kim Douglas Daniel.
Indictments and Criminal Informations 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.
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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