The president of a Monroe company who pleaded guilty to defrauding the U.S. government on road construction contracts was sentenced Monday to 30 months in federal prison, followed by two years of supervised release, and fined $15,000.
“I realize what I did is wrong and I accept full responsibility,” Carl Andrew “Drew” Boggs III told U.S. District Judge Max O. Cogburn Jr. “As president, I should have dug deeper.”
Boggs Paving Inc., which Boggs co-owns with his brother, Chris, who was not indicted, was fined $500,000.
The sentencing ends a more than two-year legal battle in which Boggs, several employees, and the minority owner of a trucking company were indicted on a total of 30 counts of fraud and conspiracy in connection with nearly $88 million in road contracts in North and South Carolina.
Boggs Paving bid on the contracts indicating that a portion of the work would be done by a federally designated disadvantaged business enterprise, Cuthbertson Trucking Co. of Wingate, between 2004 and 2013. The purpose of the U.S. Department of Transportation’s DBE program is to increase the participation of small businesses and minority-owned enterprises in federally funded construction and transportation projects.
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.
Court records show that from June 2004 through July 2013, Boggs Paving was the prime contractor on 35 federally-funded contracts and subcontractor on two additional contracts that were valued at $87.6 million.
Cuthbertson received a $375,432 kickback in return for the use of his company’s name, according to the U.S. Attorney’s Office.
All of the defendants pleaded guilty to at least one count in summer 2014.
After hearings Friday and Monday during which the financial penalties were evaluated, Cogburn determined that the federal government had not been damaged because the roads had been built. He concluded that provable losses in the case amounted to $37,000.
“The court believes the monetary amount lost underrepresents the harm and damage done to the DBE program,” said Cogburn, noting that the federal government was not seeking restitution from the defendants.
“But the court notes that the harm done here is severe,” he said.
Under federal sentencing guidelines, the revised damage assessment resulted in reduced sentencing guidelines.
Boggs’ attorney, Kenneth Bell, a partner at McGuire Woods, argued that the loss of income from Boggs’ business and his tainted reputation had been punishment enough.
In asking for leniency, Boggs, 51, said, “I’ve learned a lot about what’s right and wrong.” He also said that following numerous calls from contractors seeking information on the case, he believes he can help others avoid legal pitfalls.
“I want to speak at industry events to tell contractors what not to do,” he said.
However, Cogburn stressed the importance of imposing a penalty so that others are deterred from skirting federal contract bidding regulations.
Boggs will surrender himself to authorities next year once a location for his incarceration has been determined. The court recommended he serve his sentence near Monroe.
Greg Miller, 61, of Matthews, a Boggs’ vice president, also received 15 months in prison followed by two years of supervised release. Before being sentenced, Miller told Cogburn that he knew “what was going on and stood by and did nothing.”
“I am responsible for the consequences of my actions,” he told the court.
Cogburn said the issue of deterrence was an important factor in his decision to sentence Miller. “People have to follow the rules,” he said. “How am I going to deter people if they think the worst they’re going to get is probation?” The court recommended that Miller, like Boggs, serve his sentence near Monroe.
Miller will surrender himself to federal authorities to begin his sentence once his place of incarceration is determined.
Also receiving sentences Monday were:
- Kevin Hicks, 44, of Monroe, Boggs’ former chief financial officer, who received two years’ probation and a $2,000 fine. “I made a terrible mistake,” Hicks told Cogburn prior to sentencing. “This experience has reminded me to take more caution and make sure that everything that comes across my desk be on the up and up.”
- John “Styx” Cuthbertson, 70, of Monroe, the owner of Cuthbertson Trucking, who received two years of probation and three months of house arrest, although he will be permitted to work. Cuthbertson was also fined $2,000.
- Greg Tucker, 42, of Oakboro, a former Boggs Paving vice president, project manager and estimator, who was sentenced to two years of probation and fined $1,000.
On Nov. 10, former Boggs Paving employee Arnold Mann of Fort Mill, South Carolina, was sentenced two years of probation and ordered to pay $7,500. Mann was the first to plead and cooperated with investigators.