- The U.S. Attorney's Office for the Northern District of New York announced earlier this month that Nathaniel P. Lorenz, CEO of Acme Powerwashing Inc. of Holley, New York, has been sentenced to 18 months in federal prison for defrauding the New York state DOT. Lorenz was convicted of eight counts of wire fraud and one count of mail fraud in November.
- Acme had bridge maintenance contracts with the state and was supposed to clean and seal segments of concrete bridge decks using a special sealant product that extends the useful life of the concrete and prevents the formation of potholes. Lorenz, according to prosecutors, did not buy the sealant but billed the state DOT for the material anyway, using another company he owned as the supplier of record, even though that company did not sell anything. This reportedly saved Acme $500,000 in material costs on approximately $1 million of work since 2012.
- The U.S. Department of Justice became involved because the Federal Highway Administration provided the funding for most of the work Acme did for the state. Lorenz must also pay $600,000 in restitution and, after he gets out of prison, serve two years of supervised release.
When the federal government funds a project, that gives it the right to step in and protect its interests.
In another case also involving concrete, the DOJ settled a civil lawsuit against Pennsylvania-based Universal Concrete Products Corp. and its co-owner and president back in January amid allegations that the company falsified test records for concrete panels furnished during construction of the $5.8 billion Silver Line extension in Washington, D.C. Silver Line officials discovered 1,750 panels that did not meet specifications, a result of inadequate air content. One of Universal's employees pleaded guilty to faking the results and must pay a $700,000 judgment.
The DOJ became involved because it provided a federal loan for the project and because another Universal employee filed a whistleblower complaint under the federal False Claims Act.
The federal government also became involved recently in a lawsuit against two contractors that performed work at the MOX Fuel Fabrication Facility in Aiken, South Carolina. In its filing, the DOJ alleges that general contractor CB&I AREVA MOX Services LLC turned in $6.4 million of fake invoices on behalf of Dayton, Ohio-based subcontractor Wise Services Inc. to the project's governing agency, the National Nuclear Security Administration, in exchange for gifts like tickets to professional sporting events and mobile phones. The DOJ filed the lawsuit under the Federal Claims and Anti-Kickback Acts.