Multiple Defendants Charged in (Scheme Involving Over $200 Million in Small Business Contracts)

[nitpicker]

https://www.justice.gov/usao-edwi/pr/multiple-defandants-charged-fraud-and-money-laundering-scheme-involving-over-200

Department of Justice
U.S. Attorney’s Office
Eastern District of Wisconsin

FOR IMMEDIATE RELEASE
Tuesday, April 3, 2018

Multiple Defendants Charged in Fraud and Money Laundering Scheme Involving Over $200 Million in Small Business Contracts

United States Attorney Matthew D. Krueger for the Eastern District of Wisconsin announced that on April 3, 2018, a federal grand jury returned a twenty-two count Indictment charging three defendants with a 12-year fraud and money laundering scheme involving over $200 million in government-funded contracts intended to benefit small businesses. The Indictment named individuals Brian L. Ganos (age: 57) of Muskego and Mark F. Spindler (age: 56) of Menomonee Falls, and the business Sonag Company, Inc. as defendants. In a related case, Nicholas Rivecca, Sr. (age: 68) of Hartland, agreed to plead guilty to an Information charging him with conspiring to defraud the United States.

The indicted defendants were charged with a conspiracy to commit mail fraud and wire fraud. According to the Indictment, the conspiracy involved operating construction companies with straw owners who qualified as a disadvantaged individual or as a service-disabled veteran, but who did not actually control the companies. The conspirators then fraudulently obtained small business program certifications to win government-funded contracts to which they were not entitled. The Indictment alleges that “the conspirators enriched themselves, undermined the small business programs, and deprived honest small businesses of opportunities for work.”

Specifically, the Indictment and Information allege the following:
•Nuvo Construction Company, Inc. was misrepresented to be majority-owned and controlled by J.L. in order to obtain certifications as a Small Disadvantaged Business from the U.S. Small Business Administration (SBA) and as a Disadvantaged Business Enterprise (DBE) from Milwaukee County. In reality, J.L. worked full-time for a different entity in Minnesota and did not actually control Nuvo.
•C3T, Inc. was misrepresented to be majority owned and controlled by T.A. to obtain verification as a Service-Disabled Veteran-Owned Small Business. In reality, for long stretches, T.A. had virtually no involvement in C3T.
•Pagasa Construction Company, Inc. was misrepresented to be majority owned and controlled by O.M. in order to obtain certification as a Small Disadvantaged Business from the SBA. In reality, O.M. relied on the assistance of conspirators to form Pagasa.

The Indictment alleges that the defendants used those certifications to obtain over $200 million in federal, state, and local contract payments. These included federal construction contracts that were set aside for Small Disadvantaged Businesses or Service-Disabled Veteran-Owned Small Businesses. The Indictment also alleges that the scheme included using Nuvo’s

DBE certification to win ready-mix concrete contracts based on the false representation that Nuvo provided ready-mix concrete independently when, in truth, Nuvo’s concrete operations depended heavily on Sonag Ready Mix. As a part owner of Sonag Ready Mix, Nicholas Rivecca, Sr. agreed to plead guilty to that portion of the scheme.

According to the Indictment, on multiple occasions, the conspirators engaged in efforts to conceal the scheme and obstruct investigations into the matter. It alleges that, when interviewed, Ganos and Spindler each gave materially false statements to federal agents.

The Indictment also alleges that Ganos conspired with Sonag Company, Inc. and others to launder proceeds of the fraud scheme in order to disguise and conceal the nature, source, and location of those fraud proceeds. As a part of that conspiracy, Ganos is alleged to have transferred fraud proceeds from accounts of Nuvo and C3T to accounts that Ganos controlled. The Indictment further charged Ganos with three counts of concealment money laundering transactions, one of which involved the purchase of a Corvette with proceeds of the fraud scheme, and seven counts of spending money laundering transactions.
(snip)

[nitpicker]

1. Link to background from the Milwaukee Journal Sentinel

https://www.jsonline.com/story/news/2016/08/05/milwaukee-firms-suspected-federal-fraud/88312616/