Antitrust Law Daily Contractor co-owner pleads guilty in fraud investigation
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Wednesday, August 24, 2016

Contractor co-owner pleads guilty in fraud investigation

By Jeffrey May, J.D.

A federal investigation into irregularities in contracts awarded through a U.S. Small Business Administration (SBA) program intended for businesses owned by "socially and economically disadvantaged individuals" has netted another former executive of construction management company/general contractor MCC Construction Corporation (MCC). Walter Crummy, a former officer and owner of MCC, pleaded guilty to a federal charge of conspiring to commit wire fraud, the Department of Justice Antitrust Division announced yesterday. Crummy also agreed to pay forfeiture in the amount of $105,618 (U.S. v. Crummy, Case No. 1:16-cr-00133-KBJ).

In January 2016, MCC was charged with engaging in a scheme to defraud the Small Business Administration (SBA). MCC has admitted to securing government contracts by conspiring with companies that were certified to participate in the SBA’s Section 8a program for small businesses owned by disadvantaged individuals. The companies, which were not named in the information, did not perform work on the projects; however, they retained a guaranteed percentage of each contract for simply obtaining the contracts for MCC. SBA 8(a)-certified companies are required to perform 15 percent or more of the work with their own employees. According to the government, MCC was able to win 27 government contracts worth over $70 million from 2008 to 2011. MCC agreed to pay $1,769,924 in criminal penalties and forfeiture. In June, a manager of MCC, Thomas Harper, pleaded guilty to a charge that he conspired to commit fraud on the United States by participating in the scheme.

Now, Crummy has pleaded guilty to participating in the scheme. At various times, Crummy held the title of controller and CFO at the Colorado-based company. Crummy’s role in the challenged conduct extended from December 2009 until August 2013. He was charged in a criminal information filed on July 22. Sentencing is scheduled for December 13. The charge carries a statutory maximum of five years in prison and potential financial penalties, according to the government. Crummy was released on a personal recognizance bond.

Attorneys: Justin P. Murphy and John P. Marston for U.S. Department of Justice. Ralph J. Caccia (Wiley Rein LLP) for Walter Crummy.

Companies: MCC Construction Corp.

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