A North Carolina engineering firm was sentenced today after pleading guilty to long lasting conspiracies to rig bids and defraud the North Carolina Department of Transportation (NCDOT).
According to court documents, Contech Engineered Solutions LLC (Contech) pleaded guilty to one count of violating the Sherman Act and one count of conspiracy to commit fraud, as charged in a six-count indictment filed in the Eastern District of North Carolina on Oct. 21, 2020. Contech admitted to conspiring to rig bids to the NCDOT and conspiring to defraud the NCDOT in order to fraudulently obtain contracts for infrastructure projects. The conspiracies started at least as early as 2009 and continued at least until March 2018. Former Contech executive Brent Brewbaker was charged as a co-defendant in the same six-count indictment, and he remains under indictment.
“Today’s resolution demonstrates the Antitrust Division’s unwavering commitment to holding accountable those who cheat the competitive process at the expense of the American taxpayer,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “A critical part of that mission is seeking restitution to compensate government victims of public procurement crimes.”
“This is a case about fraud and collusion in the North Carolina bidding process for certain water drainage system components,” said Acting U.S. Attorney G. Norman Acker III for the Eastern District of North Carolina. “All taxpayers lose when companies submit false records in an effort to game the bidding system. I applaud our partners in the Department of Justice for their efforts to halt such practices in North Carolina.”
“Activities related to collusion, bid rigging and market allocation do not promote an environment conducive to open competition which harms the consumer,” said Acting Executive Special Agent in Charge Steven Stuller of the U.S. Postal Service (USPS) Office of Inspector General. “The USPS spends hundreds of millions of dollars on new construction, maintenance and renovation of USPS facilities. Along with the Department of Justice and our federal law enforcement partners, the USPS Office of Inspector General will aggressively investigate those who would engage in this type of harmful conduct.”
“The agreement and sentence imposed should serve as a significant deterrent for anyone who chooses corporate greed over open and fair competition in transportation projects funded with federal dollars,” said Special Agent-in-Charge Jamie Mazzone of the U.S. Department of Transportation Office of Inspector General, Mid-Atlantic Region. “Together with our law enforcement and prosecutorial partners, we will continue our efforts to pursue and uncover corrupt conduct and hold these bad actors accountable.”
Contech pleaded guilty to one count of bid-rigging under Section One of the Sherman Antitrust Act and one count of conspiring to commit mail and wire fraud. Contech agreed to pay a criminal fine of $7,000,000 and restitution to the NCDOT in the amount of $1,533,988. Contech has also agreed to cooperate with the department’s ongoing investigation.
The Antitrust Division’s Washington Criminal I Section is prosecuting the case, which was investigated with the assistance of the USPS Office of Inspector General, the U.S. Department of Transportation Office of Inspector General, and the U.S. Attorney’s Office for the Eastern District of North Carolina.
Anyone with information concerning market allocation, price fixing, bid rigging, or other anticompetitive conduct related to the aluminum structures industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.
In November 2019, the Department of Justice created the Procurement Collusion Strike Force, a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact procurement and grant and program funding at all levels of government – federal, state, and local. For more information, visit https://www.justice.gov/procurement-collusion-strike-force.