Fraud charges not expected to hold up Indian Land road repairs

September 30, 2013 

— Special to the Fort Mill Times

Boggs Paving Inc., the company contracted to pave Shelley Mullis Road in Indian Land, along with several other roads across Lancaster County, has been indicted for alleged government contract fraud.

The charges are not expected to interfere with the local road work.

Boggs Paving Inc., Carl Andrew Boggs, III (a/k/a Drew Boggs), 49, of Waxhaw; Kevin Hicks, 42, of Monroe; Greg Miller, 59, of Matthews; Greg Tucker, 40, of Oakboro; John Cuthbertson (a/k/a Styx Cuthbertson), 68, of Monroe; and Styx Cuthbertson Trucking Company Inc. of Wingate have been indicted on 29 counts of government contract fraud, according to a release by the FBI.

Boggs Paving Inc. and the co-conspirators were charged with conspiracy to commit wire fraud, conspiracy to defraud the United States Department of Transportation, conspiracy to commit mail fraud and money laundering, among other charges, according to the FBI.

Boggs Paving Inc. is contracted to pave six roads across Chesterfield and Lancaster County, State Sen. Greg Gregory said.

Boggs Paving is working its way to Indian Land, where it will pave Shelley Mullis Road, which Gregory described as one of the worst roads in the county.

“[Shelley Mullis] is in deplorable condition,” he said. “It’s been a long time coming.”

This year, Lancaster County received $500 million in additional funding for road maintenance, Gregory said.

“We will be doing more roads going forward,” he said.

However, there is still an estimated $29 billion of needs over the next 20 years, Gregory said.

Boggs was expected to start preparing Shelley Mullis Road for paving last week, said John McCarter, District 4 Engineering Administrator. Once shoulder grading and ditching is completed, the contractor will begin the actual paving process.

“So folks should see work starting next week and continuing until complete, which will take a couple months, depending on the weather,” McCarter said.

The indictment will not affect any existing contracts, SCDOT construction engineer Jason Johnston said.

According to allegations included in the indictment, Boggs Paving Inc. falsely certified that a “disadvantaged business enterprise” (DBE) or a “small business enterprise” (SBE) would perform and be paid for a portion of work included in contracts to obtain federally and state funded construction contracts over a 10-year period, according to the FBI. The U.S. Department of Transportation’s Short Term Lending Program assists small DBE or SBA Certified businesses in gaining the financing they need to participate in transportation-related contracts, according to the USDOT’s website.

The indictment alleges that the Boggs Paving and its affiliates used Styx Cuthbertson Trucking Company Inc., a certified DBE and SBE road construction hauler based in Monroe, as a subcontractor to obtain the construction contracts. The indictment alleges that Styx Cuthbertson received a kickback for allowing his name and DBE status to be used by Boggs Paving.

The indictment alleges that Boggs Paving was the prime contractor on 35 federally funded contracts and a subcontractor for two more contracts worth more than $87.6 million from June 2004 through the present.

For the past decade, Boggs Paving claimed $3.7 million in DBE credits on these contracts for payments supposedly made to Styx, but only paid Styx $375,432 for work it had actually completed on these contracts, according to the FBI.

The Indictment alleges that Boggs and the other conspirators ran payments through a nominee bank account in Styx‘s name, but funneled checks back to Boggs Paving and its affiliates.

Boggs Paving and its affiliates are not DBEs or SBEs, but were performing the construction work. Each time a deposit was made into the Styx account, a Boggs paving employee would cut a check from that account to Boggs Paving or the firm that actually did the construction work, according to the FBI.

The indictment also alleges that Boggs Paving Inc. created the illusion that Styx was doing the construction work by placing magnetic decals bearing the “Styx” logo over the “Boggs” logo on company trucks. Boggs Paving created quotes and contracts under the Styx name, according to the FBI.

Boggs and the other conspirators can face a maximum of five years in prison for the conspiracy charge and a maximum of 20 years for each wire and mail fraud count, according to the FBI. If convicted of the money laundering charge, the conspirators could face a maximum of 10 years in prison, with each charge also carrying a $250,000 fine, according to the FBI.

Boggs Paving spokesman Bobby Fisher released this statement:

“We are extremely disappointed in the allegations from the U.S. Attorney’s Office for the Western District of North Carolina. Boggs Paving has been cooperating fully with officials since learning of questions about our company’s relationship with Styx Cuthbertson Trucking, Inc., which is a certified Disadvantaged Business Enterprise. Despite this cooperation, the U.S. Attorney’s Office has brought charges that we will vigorously contest.

“While this unfortunate situation is most troubling, we look forward to having our day in court and an opportunity to present our side of the story. We are confident a full and complete examination of the facts will clear Boggs Paving and all its employees.

“For almost three decades, our family business and its 400 employees have served communities across North and South Carolina. We are committed to continuing to work extremely hard to deliver the same outstanding service our clients have come to expect from the Boggs Group.”

Court appearance

The execs indicted in the fraud case appeared in court for the first time Aug. 20. The company and other defendants pleaded not guilty, said Lia Bantavani, Public Affairs Officer for the U.S. Attorney’s Office for the Western District of North Carolina.

Bantavani said the U.S. Attorney’s Office had no further comment on the case at this time.

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