FOR IMMEDIATE RELEASE
Thursday, September 17, 1998
Contact: Jeff Nelligan
Telephone: (202) 366-6312
OIG 32-98
West Virginia Firm
Sentenced
In Disadvantaged Business Enterprise Fraud
A Wheeling, W.Va., corporation was sentenced this week for fraud in the awarding of a disadvantaged business enterprise subcontract, the U.S. Department of Transportation’s Office of Inspector General has announced.
Tri-State Asphalt Corporation of Wheeling was sentenced to three years’ probation and ordered to pay a fine of $500,000 following conviction on four counts against the corporation and co-defendants Brothers Construction Company of Ohio, Inc. and Brenda Kay Ware. The sentencing took place at U.S. District Court for the Northern District of West Virginia.
In April 1994, the U.S. Department of Transportation awarded a $5.2 million contract to a joint venture that included Tri-State Asphalt Corporation and another company for construction of the Elm Grove to Pennsylvania State Line Interstate Highway project. Pursuant to federal and state regulations, to be eligible for the contract, the prime contractor had to subcontract at least 8 percent of the contract price to one or more West Virginia certified disadvantaged business enterprises.
Tri-State Asphalt entered into a $186,000 subcontract under which Brothers Construction, a disadvantaged construction company, was to install part of the project’s drainage system.
In June of 1994, a third party, Brenda Kay Ware, entered into a secret illegal agreement with Kermit Bunn, the president of Bunn Construction of Ohio, Inc., a non-disadvantaged construction company, under which Bunn Construction would covertly perform Brothers Construction’s work while representing that Brothers Construction was doing the work.
Tri-State Asphalt was charged because it knew of and condoned the illegal deal between Brothers Construction and Bunn Construction and misled the state highway division into believing that Brothers Construction had actually performed the work on the project.
Brothers Construction Company, Inc., Ware, and Tri-State Asphalt were convicted of conspiracy to use the interstate telephone system to defraud the federal government and West Virginia to obtain money by false pretenses and to make false statements.
Brothers Construction Company of Ohio, Inc., was sentenced on Aug. 4, 1998, to three years’ probation. Brenda Kay Ware is awaiting sentencing.
The investigation was undertaken by the Office of Inspector General, U.S. Department of Transportation and the West Virginia Department of Transportation auditing division.
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