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Press Release
Press Release
Following a six-day trial before U.S. District Judge Ursula Ungaro, a Miami jury convicted Javier Estepa, 48, of Davie, and Diego Alejandro Estepa Vasquez, 37, of Boca Raton, of conspiracy to commit wire fraud, wire fraud, and false statements to a federal agency. Estepa and Vasquez were the president and vice-president, respectively, of Aaron Construction Group, Inc. (“Aaron Construction”).
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, and Rafiq Ahmad, Special Agent in Charge, U.S. Department of Labor, Office of the Inspector General (DOL-OIG), Nadine Gurley, Special Agent in Charge, U.S. Department of Housing and Urban Development, Office of the Inspector General (HUD-OIG), Mary T. Cagle, Inspector General, Miami-Dade County, Office of the Inspector General (OIG), made the announcement.
On May 24, 2019, Judge Ungaro sentenced Estepa to 51 months in prison to be followed by three years of supervised release; and sentenced Vasquez to 41 months in prison to be followed by three years of supervised release.
The evidence at trial established that, between June 2014 and December 2016, the defendants engaged in a scheme to unlawfully enrich themselves by securing Miami-Dade Public Housing and Community Development (PHCD) bid awards and causing payments on those contracts by making materially false and fraudulent representations, and by the concealment of material facts concerning, among other things, the utilization of subcontractors, the number of workers employed on the construction projects, the hours worked, and the status of those workers as employees of Aaron Construction.
Estepa and Vasquez submitted bids to PHCD, on behalf of Aaron Construction, for specific renovation and repair of low income housing in various locations throughout Miami-Dade County. In the bids, Estepa and Vasquez falsely and fraudulently represented that (1) no subcontractors would be utilized in connection with the contract, (2) that each worker would be paid for each hour worked, including for overtime, according to the Davis Bacon prevailing wage rates, and (3) that Aaron Construction would obtain workers’ compensation insurance, in accordance with state laws. However, immediately after being awarded the contracts, Aaron Construction entered into agreements with subcontractors which set a fixed payment at very low amounts for their work, regardless of the number of hours worked. In addition, Aaron Construction required subcontractors to provide the information of two or three subcontractor employees so that they could be placed on Aaron Construction’s certified payroll to appear as if they were Aaron Construction employees. The evidence at trial established that Aaron Construction failed to report accurately the hour employees worked on the job sites or the specific categories of work performed.
In order to obtain payment from PHCD, Estepa and Vasquez submitted Periodic or Final Estimate for Payment packets to PHCD containing false and fraudulent certified payroll records that listed fewer workers than were actually employed on the project and falsified the number of hours worked. In addition, the evidence at trial established that the workers were not paid the appropriate wages under the Davis Bacon Act, nor were the workers paid overtime. Estepa and Vasquez falsely and fraudulently stated that they had no subcontractors working on the project, falsely characterizing the workers as employees of Aaron Construction, when in fact they were subcontractors and subcontractor employees. In addition, Estepa and Vasquez submitted with the Periodic or Final Estimate for Payment packets sworn statements of compliance that falsely and fraudulently certified that the information submitted was true and correct. Due to these false and fraudulent submissions, PHCD transferred over $3.9 million dollars in funds to bank accounts controlled by Estepa and Vasquez.
U.S. Attorney Fajardo Orshan commended the investigative efforts of DOL-OIG, HUD-OIG, and Miami-Dade County, Office of the Inspector General. The case was prosecuted by Assistant U.S. Attorneys Joshua S. Rothstein and John Gonsoulin.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov