Prosecutor seeks dismissal of remaining charges against Boggs Paving

Listen to this article

CHARLOTTE – The U.S. Attorney’s Office on Wednesday filed a motion seeking the dismissal of the 28 charges remaining against Boggs Paving Inc., the Monroe-based company that has pleaded guilty to conspiring to defraud the federal government on road construction contracts totaling more than $87.6 million.

Earlier this month, prosecutors had requested that the case be left on the docket until Boggs Paving complied with requests for information concerning the case.  In its filing, the office indicated those requests had been met.

Boggs’s attorneys, Kenneth D. Bell of McGuireWoods LLP and James D. Galyean of Nexsen Pruet LLC, did not respond to emails seeking comment.

Boggs Paving’s September guilty plea to one count of a 29-count indictment was not part of a plea agreement, so the other 28 charges remained active. As of Friday, U.S. District Judge Max O. Cogburn Jr. had not ruled on the motion, which was filed with the U.S. District Court for the Western District of North Carolina in Charlotte.

Should the charges be dismissed, next comes sentencing and penalties for the company, five of its current and former officials, and John “Styx” Cuthbertson, the owner of Cuthbertson Trucking Co. Inc., who was indicted as well. All have pleaded guilty to either one or two of the charges against them.

A sentencing date had not been set as of Friday, but U.S. Attorney’s Office spokeswoman Lia Bantavani said it would be in 2015.

The possible sentences range from probation for former Boggs Paving employee Arnold Mann, who was the first to plead guilty under an agreement with prosecutors, to up to 20 years for money laundering conspiracy, to which the paving company’s president and co-owner, Carl Andrew “Drew” Boggs III, pleaded guilty. The charges also carry fines ranging from $250,000 to $500,000, and possible penalties equaling the net proceeds the companies received through the fraudulent contracts.

Boggs Paving was indicted in July 2013 on charges of wire and mail fraud; conspiracy to defraud the federal government; money laundering; and money laundering conspiracy.

The charges resulted from a federal investigation into contracts for road projects in North and South Carolina between January 2003 and December 2012 that were partially funded by the U.S. Department of Transportation. Those contracts required that Boggs Paving subcontract a portion of work to a disadvantaged business enterprise.

Boggs Paving claimed DBE credits for subcontracting $3.75 million of the work to minority-owned Cuthbertson Trucking of Wingate. In fact, according to the U.S. Attorney’s Office, Boggs performed the work and paid Cuthbertson $375,432 as a kickback.

Executives at Boggs Paving were accused of setting up bank accounts in Cuthbertson’s name that were controlled by Boggs employees, and of placing magnetic signs on Boggs Paving trucks that bore Cuthbertson’s company name.

In the original indictment, Boggs Paving, four company executives, Cuthbertson Trucking and Styx Cuthbertson were charged with 29 counts. In October 2013, a superseding indictment added Mann and an additional charge against Cuthbertson of making a false statement to a bank.

Sentencing and penalties will be decided for:

• Arnold Mann, of Fort Mill, S.C., a former project manager, estimator and area manager at Boggs Paving, who pleaded guilty June 25 to one count of conspiracy to defraud the DOT. He was originally charged with 27 counts. Under the plea agreement, he is likely to receive probation when sentenced.
• Kevin Hicks, of Monroe, the former chief financial officer at Boggs Paving, pleaded guilty July 22 to one count of conspiracy to defraud the DOT and one count of money laundering conspiracy. He was originally charged with 26 counts. The U.S. Attorney’s Office recommended a sentence of up to 15 months.
• Greg Tucker, of Oakboro, a former Boggs Paving vice president, project manager and estimator, pleaded guilty July 24 to one count of conspiracy to defraud the DOT. He had been charged with 12 counts. The U.S. Attorney’s Office recommended a sentence of one to 15 months.
• Greg Miller, of Matthews, a vice president at Boggs Paving Inc. of Monroe, pleaded guilty Aug. 4 to one count of conspiracy to defraud the DOT. He had been charged with 26 counts. The U.S. Attorney’s Office recommended a reduced sentence.
• Cuthbertson, of Monroe, pleaded guilty Aug. 8 to one count of conspiracy to defraud the DOT. He had been charged with 30 counts. The U.S. Attorney’s Office said it would recommend a reduced sentence. The charges against his company were dismissed.
• Drew Boggs, of Waxhaw, pleaded guilty to one count of conspiracy and one count of money laundering conspiracy. An additional 27 counts are expected to be dismissed. The U.S. Attorney’s Office has filed documents indicating it plans to seek at least $1.5 million in restitution from Boggs.
• Boggs Paving Inc. pleaded guilty Sept. 10 to one count of conspiracy to defraud the DOT. The U.S. Attorney’s Office has requested that the remaining 28 counts be dismissed.