Investigations

R. Alexander Acosta, United States Attorney for the Southern District of Florida; Katherine Fernandez-Rundle, State Attorney of the Eleventh Judicial Circuit of Florida; Robert Parker, Director, Miami-Dade Police Department; Brian Wimpling, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division; Michael S. Clemens, Special Agent in Charge, Federal Bureau of Investigation; and Barbara Barnet, Special Agent in Charge, United States Department of Transportation, Office of Inspector General, announced today that defendants, Dewitt Jackson “Jack” Maxwell and Arthur E. Teele, Jr., were charged by a federal grand jury in Miami with one (1) count of conspiracy to commit mail and wire fraud, two (2) counts of wire fraud, ten (10) counts of mail fraud, and two (2) counts of conspiracy to commit money laundering. In addition, Maxwell was charged with nine (9) counts of money laundering, while Teele was charged with ten (10) counts of money laundering. All of the charges arose out of a scheme to defraud the Miami-Dade County Aviation Department and others by the fraudulent acquisition of electrical construction work at Miami International Airport. The allegations contained in the Indictment center on the federal Disadvantaged Business Enterprise (“DBE”) program and the Miami-Dade County Community Small Business Enterprise (“CSBE”) program, both of which are designed to encourage the growth and development of qualifying small businesses. Consistent with federal regulation and county ordinance, participation goals under both programs were set as part of the Miami International Airport expansion project. As a result, businesses that qualified under either the DBE or CSBE program were allowed to bid for a part of the construction work at the Miami International Airport. Both programs, however, require that the DBE or CSBE entity perform the work of a contract and carry out its responsibilities by actually performing, managing, and supervising the work involved. The Indictment alleges that between approximately December 2001 and the present, Maxwell, Teele and others conspired to cause FLP Enterprises, Inc. (“FLP”), a DBE and CSBE company, to receive electrical construction work at Miami International Airport in satisfaction of DBE and CSBE participation requirements, but to have the work actually completed by Fisk Electric Corporation, which was neither a DBE nor a CSBE. The defendants accomplished their goals through a well-organized effort to both mislead the Miami-Dade County Aviation Department and others, and to conceal their scheme from these same entities. First, defendants Maxwell and Teele caused FLP to be certified under these two programs. Then, Maxwell caused bids to be submitted on behalf of both Fisk and FLP for electrical work at Miami International Airport, stating that FLP would perform a portion of that work in satisfaction of DBE or CSBE participation goals. As a result, more than $20 million in electrical construction work was awarded to FLP and Fisk. FLP, however, did not perform the work as represented in these bids. Instead, Fisk performed the work, even as the conspirators endeavored to conceal this reality from the Miami-Dade County Aviation Department and others. For the use of its name, FLP recieved a fee of between 3% and 5% of the value of the work assigned to it on paper. The Indictment also alleges that a number of artifices that were employed to create the illusion that FLP was performing the electrical construction work. For example, Fisk employees were shifted to FLP, and while they continued to work for Fisk supervisors, they nonetheless received FLP paychecks. The defendants also caused Fisk to order supplies under FLP’s name, and then issue two-party checks to make it appear that FLP was paying for these items when it was not. Furthermore, letters of intent were submitted as part of the bidding process which falsely represented that FLP would perform a certain percentage or dollar value of electrical work on certain jobs at Miami International Airport. These representations were supported by Monthly Utilization Reports which the conspirators caused to be filed on these jobs, in which it was falsely represented that FLP was in fact performing a commercially useful function as a DBE or CSBE. The defendants also caused FLP to utilize approximately $385,000 in proceeds from the fraud scheme to pay for materials actually received by Fisk. When the Department of Business Development began investigating the activities of these entities and issued a notice of violation to FLP, the defendants caused FLP to respond with a letter containing false representations about FLP’s relationship with Fisk. Mr. Acosta commended the investigative efforts of the State Attorney’s Office, the Miami-Dade Police Department, the Internal Revenue Service, the Federal Bureau of Investigation and the United States Department of Transportation. This case is being prosecuted by Assistant United States Attorney David Buckner and Special Assistant United States Attorney Dan Bernstein.