Investigations

On February 13 2008, Dennis F. Campbell, former Sales and Marketing Vice President of Schuylkill Product Inc. (SPI), pled guilty in U.S. District Court in Harrisburg, Pennsylvania, for his participation in a pass–through scheme that involved approximately 340 federally funded Disadvantaged Business Enterprise (DBE) subcontracts valued at $121 million. The Pennsylvania Department of Transportation (PennDOT) administered the contracts in question between 1993 and 2007. Specifically, officials of SPI and CDS Engineers Inc. (CDS)–a subsidiary of SPI–used Marikina Construction Corporation (Marikina)–a bridge and highway construction and certified DBE–to obtain DBE subcontracts for bridge beam installation projects with the intention of having CDS and SPI employees perform, manage, control, and supervise the beam installations. Mr. Campbell admitted that SPI and CDS officials prepared bid proposals and cost estimates on Marikina letterhead to make it appear that Marikina prepared the documents. SPI and CDS paid Marikina a fixed fee–25 percent of which Mr. Campbell admitted he and a CDS supervisor each received as a kickback–for the use of its name in obtaining DBE contracts. The Internal Revenue Service/Criminal Investigation Division is currently evaluating the actual dollar value of the aforementioned kickbacks. A CDS supervisor and work crew were paid from a Marikina payroll account to conceal the scheme. Through various regulated and required project certifications and submissions Marikina provided, PennDOT counted the entire cost of the DBE subcontracts, $121 million, toward the general contractor’s DBE goals as stipulated in the various prime contracts. DOT/OIG will refer Mr. Campbell for suspension and debarment action in the immediate future. This is the largest reported DBE fraud scheme in DOT history and is an ongoing, joint investigation with the Federal Bureau of Investigation and the U.S. Department of Labor/Office of Inspector General, with assistance from the Internal Revenue Service.