A sentencing hearing has been set for Nov. 10 for the first of six men who pleaded guilty in a nearly $88 million road construction fraud case.
Arnold Mann of Fort Mill, South Carolina, is a former employee of Boggs Paving Inc. of Monroe and was the first to plead guilty to a charge related to his role in a conspiracy to defraud state and federal transportation departments by claiming to subcontract a portion of the company’s work to a minority-owned business.
Under a plea agreement reached with federal prosecutors, Mann is expected to be sentenced to probation as a result of his cooperation with investigators and “lesser culpability as compared to his co-defendants,” according to a June 2014 plea hearing transcript. A former project manager, estimator and area manager at Boggs Paving, Mann pleaded guilty to one count of conspiracy to defraud the U.S. Department of Transportation.
Mann was not charged in the U.S. Attorney Office’s original July 2013 indictment, but was added, along with an additional charge, to a superseding indictment in October of that year. All told, six men and two companies were charged with a total of 30 counts of wire and mail fraud, conspiracy to defraud the federal government, money laundering and money laundering conspiracy.
Possible sentences range 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.
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, bidding on projects in Cuthbertson’s name, and placing magnetic signs on Boggs Paving trucks that bore Cuthbertson’s company name.
In addition to Mann, others who pleaded guilty were:
- Kevin Hicks, of Monroe, the former chief financial officer at Boggs Paving, who pleaded guilty in July 2014 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 in July 2014 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 in August 2014 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.
- John “Styx” Cuthbertson, of Monroe, pleaded guilty in August 2014 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 in August 2014 to one count of conspiracy and one count of money laundering conspiracy. An additional 27 counts are expected to be dismissed when he is sentenced.
- Boggs Paving Inc. pleaded guilty in September 2014 to one count of conspiracy to defraud the DOT. The remaining 28 counts were dismissed.