State Contractor Convicted of Defrauding New York State on Federally Funded Contracts
SYRACUSE, NEW YORK – A jury voted yesterday to convict Nathaniel P. Lorenz, age 47, of Holley, New York, of wire and mail fraud charges, following a 7-day trial.
The announcement was made by United States Attorney Grant C. Jaquith; Douglas Shoemaker, Special Agent in Charge of the Northeast Regional Office of the United States Department of Transportation, Office of Inspector General (USDOT-OIG); New York State Inspector General Catherine Leahy Scott; and Robert L. Keihm, Chief Investigator for the New York State Department of Transportation (NYSDOT) Investigations Bureau.
The evidence at trial established that Lorenz, a former police officer and sheriff’s deputy, submitted fake invoices to the New York State Department of Transportation (NYSDOT) in order to conceal that he was not buying the materials needed to perform bridge maintenance contracts in the Binghamton and Buffalo regions.
United States Attorney Grant C. Jaquith stated: “Nathaniel Lorenz ripped off New York State taxpayers by doing shoddy maintenance work on bridges New Yorkers depend on every day and then submitting phony paperwork to cover up his fraud. Together with our state and federal law enforcement partners, we will continue to vigilantly watch over federally funded contractors so that taxpayers get what they pay for.”
DOT-OIG Special Agent in Charge Douglas Shoemaker stated: “The conviction of Nathaniel P. Lorenz for fraud related to federally funded New York State Department of Transportation contracts demonstrates our commitment to maintaining the safety and integrity of public infrastructure projects. Working with our law enforcement and prosecutorial partners, we will continue our vigorous efforts to prevent, detect and prosecute individuals who inappropriately use federal taxpayer dollars.”
New York State Inspector General Catherine Leahy Scott stated: “This greedy contractor spent years blatantly shortchanging taxpayers and lining his own pockets while hastening the deterioration of highway pavement for which he was paid millions of dollars to help protect. The federal jury easily saw right through his criminal scheme and convicted him on all counts. I thank the United States Department of Transportation Office of the Inspector General and the New York State Department of Transportation for their partnership investigating this matter, and United States Attorney for the Northern District of New York Grant C. Jaquith and his office for prosecuting this matter.”
Lorenz’s company, ACME Powerwashing Inc. (ACME) of Holley, contracted with NYSDOT in 2015 and 2016 to clean and seal the road portions of bridges, known as concrete bridge decks. The work involved cleaning the bridge decks and then sealing them with a chemical that makes the concrete more resistant to penetration by water, chlorides and waterborne contaminants, which might cause potholes and other deterioration. The Federal Highway Administration, part of the United States Department of Transportation, provided most of the money for these contracts.
Each of these contracts required ACME to purchase a certain amount of sealing chemical, based on how many square feet of concrete bridge deck was sealed. On three contracts in 2015 and 2016, Lorenz submitted fraudulent invoices to NYSDOT in order to conceal that he was not buying the amount of the sealing chemicals required by the contracts. Lorenz falsely claimed that he was buying sealing chemicals from S.E. Brett, Inc., another company that he owned that does not sell anything.
On these 3 contracts alone, NYSDOT paid ACME more than $1.1 million for bridge sealing work, and about $759,000 for bridge cleaning and other work. The evidence at trial established that ACME, which had been a NYSDOT contractor since 2010, was not buying the appropriate amount of sealing chemicals since at least 2012 and had saved at least $500,000 in avoided material costs. The loss to the government will be determined at sentencing.
Sentencing is scheduled for February 14, 2019 in Syracuse before Senior United States District Judge Norman A. Mordue. Lorenz faces up to 20 years in prison, a maximum $250,000 fine, and up to 3 years of post-imprisonment supervised release. He may also be ordered to pay restitution to one or more governmental agencies. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case was investigated by USDOT-OIG, NYSDOT’s Investigations Bureau, and the Office of the New York State Inspector General, and is being prosecuted by Assistant U.S. Attorney Michael Barnett.