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Justice News

Department of Justice
U.S. Attorney’s Office
District of Rhode Island

Tuesday, December 2, 2014

Rhode Island Builder Sentenced For Filing False Claims, Making False Statements To Collect $1.8M In Federal Funds

PROVIDENCE, R.I. – Donald F. Ihlefeld, 71, of Cranston, R.I., owner of Alhambra Building Company of Warwick, R.I., was sentenced today in U.S. District Court in Providence to two years probation, ordered to perform 200 hours community service and to provide $20,000 in funding to the Rhode Island Foundation to support programs that assist immigrant populations in Rhode Island for filing false claims and false documents in order to collect more than $1.8 million dollars in federal funds during a renovation project of a former textile mill building in West Warwick, R.I.

Ihlefeld’s sentence, imposed by U.S. District Court Judge John J. McConnell, Jr., is announced by United States Attorney Peter F. Neronha and Phillip Coyne, special agent in charge of the Department of Health and Human Services, Office of Inspector General (HHS OIG).

An investigation by HHS OIG and the United States Attorney’s Office determined that Ihlefeld falsely represented that he paid employees locally prevailing wages for work performed during the renovation project of the former mill building into a walk-in health center. The construction project, known as the Cotton Shed Project, was funded in part by the American Recovery and Reinvestment Act of 2009, through grants provided by the U.S. Department of Health and Human Services, Health Resources and Services Administration.

 According to court documents and information presented to the court, in October 2010, Thundermist Health Center, a non-profit community health center, awarded a contract to Alhambra Building Company as construction manager for the Cotton Shed Project. As a condition of payment, as required by the Stimulus Program pursuant to the Davis-Bacon Act, Alhambra Building Company was required to pay laborers no less than locally prevailing wages plus benefits.  In bidding on the project, Alhambra noted its prior experience working on Davis-Bacon projects.

            In January 2011 through mid-April 2011, Ihlefeld submitted invoices for payment for construction work performed by his company from December 2010 through January 2011 totaling approximately $1.8 million dollars, knowing that he and his company failed to pay employees local prevailing wages. Additionally, during the same time frame, Ihlefeld and his company submitted false certified payroll reports to Thundermist which misrepresented the identity of employees working on the project, total hours worked by employees and that it was paying Davis-Bacon wages to employees working on the project. The employees Alhambra failed to pay the appropriate wages were non-citizen Spanish speaking employees hired by Alhambra. Those employees were paid substantially less than the prevailing wage of approximately $34 per hour.

 The case was prosecuted by Assistant U.S. Attorney Dulce Donovan.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force.  The President established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.


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Contact: 401-709-5357

Updated June 22, 2015