Investigations
Former Pennsylvania Construction Company CEO Sentenced to Over 4 Years in Jail for His Role in the Largest DBE Fraud in DOT History
FBI, Philadelphia Division - Press ReleaseSummary
On July 14, 2014, Ernest G. Fink, former CEO and co-owner of Schuylkill Products, Inc. (SPI), was sentenced in U.S. District Court, Harrisburg, Pennsylvania, to 51 months imprisonment and ordered to pay fines totaling $25,100 for his role in the largest reported Disadvantaged Business Enterprise (DBE) fraud in the Department's history. Fink was Vice-President of SPI and its wholly-owned subsidiary CDS Engineers Inc. (CDS), until April 2009 when SPI was sold. SPI manufactured highway concrete bridge beams used in Pennsylvania and surrounding states.
The investigation revealed that Fink and others defrauded the U.S. Department of Transportation (DOT) DBE program for more than 15 years and the scheme affected more than $136 million in highway transportation contracts. SPI and CDS used a Connecticut highway construction company, Marikina Construction Corporation (Marikina), as a shell DBE corporation to obtain DBE subcontracts for bridge beam installation projects with the intention of having SPI and CDS employees actually perform, manage, control, and supervise the beam installations. Fink admitted that SPI and CDS employees pretended to be Marikina employees by using Marikina business cards, email addresses, stationary, signature stamps, and magnetic placards and decals bearing Marikina logo to cover up SPI and CDS logos on company vehicles.
Recently, Joseph Nagle, the SPI president, was sentenced to 84 months imprisonment after a federal criminal trial. Earlier this year, three other former executives were sentenced after pleading guilty. Romeo Cruz, the former owner of Marikina, received 33 months incarceration. CDS associates Timothy Hubler and Dennis Campbell were sentenced to 33 and 24 months incarceration respectively. In addition, Cruz, Hubler, and Campbell were ordered to collectively pay $119 million in restitution.
This investigation was conducted by the U.S. DOT - Office of Inspector General (OIG), the Federal Bureau of Investigation, the U.S. Department of Labor - OIG, the Internal Revenue Service - Criminal Investigation Division, with assistance from the Federal Highway Administration.