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SUFFOLK COUNTY---Three of Long Island's largest asphalt producers and road paving contractors pleaded guilty Tuesday to federal mail fraud charges in connection with a bid rigging scheme against Suffolk County and the Town of Brookhaven.
The individual defendants, James K. Haney, William L. Fehr Jr. and Frank G. Schambra face a maximum term of 40 years in prison. Also pleading guilty were their corporations, Suffolk Asphalt Supply Inc, Pav-Co Asphalt Inc., Prima Asphalt Concrete Inc., All-County Paving Corp. and Sundial Asphalt Co. Inc.
All of the defendants have agreed to forfeit a total of $2.3 million and to pay restitution to the county and town in the amount of $326,343.20. Each corporate defendant also faces fines to be set by the Court, which could reach approximately $1 million.
The guilty plea proceedings were held before United States Magistrate Judge William D. Wall at the U.S. Courthouse in Central Islip.
New York State law requires that public works projects be awarded in a
competitive-bidding process to the lowest responsible bidder. Companies seeking to win contracts must certify that they have not colluded or shared information about their bids with potential competitors.
Haney, Fehr and Schambra were arrested in November 2005, following a
24-month investigation during which the defendants were secretly recorded fixing the price of asphalt charged to the county and town and dividing various road paving projects among the members of the cartel. Their scheme is estimated to have artificially inflated the price of asphalt by as much as $10 per ton.
In December 2005, a federal grand jury returned an indictment charging the
individual defendants and their five corporations with conspiring to commit mail fraud in connection with two contracts set to be awarded in 2005. In May 2006, the grand jury returned a superseding indictment charging that the defendants' conspiracy had begun as early as July 2003 and resulted in fraudulently rigging contracts let in 2004, for which Suffolk County and Brookhaven paid a combined $2.3 million to the defendants. 12-26-06
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© 2006 North
Country Gazette
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