Dive Brief:
- Minnesota electrical contractor Laura Plzak of Honda Electric, has been convicted of 16 counts of theft by swindle after charges she intentionally underpaid 22 employees $242,000 on a Minnesota Department of Transportation highway project, the Star Tribune reported.
- Prosecutors say the required wage rate on the highway project was $58.50 an hour but that Plzak paid employees hourly rates as low as $17, the Star Tribune reported. According to authorities, Plzak altered employee pay records and falsified government documents to reflect the appropriate wage rates.
- Prosecutors say the most serious counts against Plzak each carry a maximum sentence of 20 years, the Star Tribune reported. Plzak's husband, co-owner of Honda, pleaded guilty to comparable charges last year and was sentenced to 22 months in prison.
Dive Insight:
Prosecutors all over the country are cracking down on fraud on government-funded projects. A former U.S. Navy contractor recently pleaded guilty to giving false statements to the government after he cheated subcontractors out of more than $1.2 million on a $4.4 million Navy project. Contactor Anthony Persaud, who prosecutors say pocketed the money, has yet to be sentenced, but he faces up to five years in prison and a fine of $250,000.
In another case, prosecutors allege that Connecticut contractor URS Corp. AES overcharged for wages paid on an Amtrak Niantic River rail bridge reconstruction project in East Lyme, CT. Authorities say that URS billed Amtrak for the maximum allowable labor wage rate even though it didn't really pay their workers that much. URS has agreed to pay $580,000 to settle those claims.