CHARLOTTE — A federal judge on Wednesday accepted a guilty plea on one conspiracy count from a former employee of a road construction company charged with 29 counts of fraud and conspiracy in misrepresenting its use of a certified disadvantaged business enterprise under federal contracts.
The former employee, Arnold Mann, will likely receive probation under an agreement with the U.S. Attorney’s Office, in which he will cooperate with investigators. He will continue to remain free on bond until sentencing, which will likely take place after the September trial for Boggs Paving Inc., based in Monroe; four company executives; Styx Cuthbertson Trucking Co. of Wingate and John “Styx” Cuthbertson.
The maximum sentence for the conspiracy charge is five years in prison and a $250,000 fine. Mann had faced 27 counts, including conspiracy, wire fraud, mail fraud, money laundering conspiracy and money laundering. The maximum sentences on the charges are five years for conspiracy; 10 years for money laundering; and 20 years each for mail and wire fraud and conspiracy to launder money, and fines that could reach millions of dollars.
U.S. District Judge Max O. Cogburn Jr. said that upon accepting Mann’s plea, he was bound to also accept the agreed-upon sentence, unless Mann violates the terms of the agreement, including providing truthful information to prosecutors.
Cogburn said that the reduction in charges and agreed-upon penalty were “a really substantial departure” from typical plea bargains, and he asked U.S. Attorney Jenny G. Sugar to confirm that Mann’s cooperation was worth the reduction. She and Mann’s defense attorney, Jacob H. Sussman, said it was.
“He is the first person, and only person so far, in this indictment to be working with the government,” said Sussman, an attorney with Tin Fulton Walker & Owen.
Cogburn warned Mann that he was expected to “maximize” his involvement in the activities that led to the charges.
“You just have to tell them what you did,” he said. “Should the defendant not live up to the agreement, then all bets are off.”
Mann responded, “Yes, sir, I do understand.”
Cogburn continued, “The key is you have to tell the truth, not their truth, not somebody else’s truth, but the truth.”
Mann, who no longer works at Boggs Paving, was not charged in the original indictment, which was handed down in July 2013. He was added in an October superseding indictment, along with an additional charge of making a false statement to a bank against Cuthbertson and his trucking company.
The trial is set for Sept. 16 in U.S. District Court for the Western District of North Carolina in Charlotte for the rest of the defendants, including Boggs Paving Inc.; President and part-owner Carl Andrew “Drew” Boggs III; Chief Financial Officer Kevin Hicks; Vice President, Secretary, Chief Estimator and Contract Administrator Greg Miller; Project Manager, Estimator and Vice President Greg Tucker; Cuthbertson; and Styx Cuthbertson Trucking Co. Inc.
The charges stem from an investigation into 10 years of federally funded road projects in North Carolina and South Carolina that totaled $87.6 million. The contracts required that Boggs use Cuthbertson for a portion of the work, which Boggs Paving represented to transportation officials as being worth about $7 million. Instead, prosecutors charge, Boggs Paving performed all of the work – even attaching magnetic Cuthbertson signs to its own trucks – and kept most of the money, paying Cuthbertson $375,000 for his role.