- The U.S. Department of Justice announced last week that the U.S. Attorney’s Office for the Eastern District of Arkansas sentenced the former head of a Conway, Arkansas, construction company to three years in prison for committing $2.9 million of bank fraud. Michael Beasley, former president of Cobas Inc., must also pay $2 million in restitution.
- Prosecutors said Cobas had a line of credit with a local bank that the company could tap into while waiting on customer payments on the condition that it provide the bank with copies of outstanding client invoices. In order to gain access to the line of credit, from August 2017 to December 2017, Beasley submitted almost $3 million of fake customer invoices to the bank.
- In addition to the prison sentence and restitution, Beasley must also spend two years under supervised release.
There are a wide variety of offenses that can land a contractor in prison, ranging from fraud to outright theft.
Earlier this month Katrina Jo Pease, former employee of Seamless Construction in St. Johns, Michigan, was sentenced to 30 months to 20 years in prison after pleading guilty to embezzling more than $1 million from the company between 2009 and 2018, The Lansing State Journal reported. Pease marked invoices that the company owed as paid and then directed that money to herself. Customers went unpaid, and Seamless is still trying to climb out from under the resulting debt.
In addition, Enrique Vera, the owner of Californian construction company Ultimate Inc. faces up to 15 years in prison for allegedly cheating the state’s workers’ compensation fund out of about $6 million, as well as other workers’ compensation and payroll-related violations. With the help of his sister Gloria Vera, authorities claim that he falsified employee payroll records to avoid paying the correct amount of workers’ comp premiums.
Authorities said the two also persuaded employees not to make valid workers’ comp claims, attempted to hide instances of employee injuries and did not pay the prevailing wage in certain circumstances. Gloria Vera faces up to 19 years in prison.
In July of last year, the DOJ announced that the owner, CEO and former president of Texas-based Herc Solutions had been sentenced to 18 months in prison for defrauding the U.S. Department of State out of $1.3 million. Gary Duff pleaded guilty to conspiracy to defraud the U.S. and to commit wire fraud after he and a co-conspirator, Steven Graves, who worked at the State Department, used inside information to help Herc secure contracts. Graves was sentenced to 15 months in prison for his part in the scheme.