Scheme to Defraud General Contractor (Road & Highway) Company Uncovered
Posted on Wed, Aug 19, 2009
In March of 2008, executives at a large highway construction contractor noticed that expenses generated by a specific Sub-Contractor involved in a large, ongoing commercial job had begun to exceed the costs projected for this phase of work. The General Contractor estimated that current losses were in excess of $200,000.00.
Texas Investigative Network, Inc. was engaged to investigate and began by analyzing invoices submitted by the sub-contractor, truck slips signed by the General Contractor’s foremen and copies of driver logs maintained at a delivery site designated for this project. The errors and inconsistencies identified in our initial analysis of these records led Investigators to believe that the monetary value of the services having recently been provided by the Sub-Contractor were noticeably less than that which was actually billed to The General Contractor.
Investigators then requested the personnel hierarchy for the General Contractor personnel as well as a list of drivers for the primary Sub-Contractor in order to identify those individuals who were in a position to have knowledge of, or participation in any activity which may have contributed to this fraudulent scheme.
Surveillance was then initiated at the delivery site designated for this project, and continued for several consecutive days.
The decision to conduct surveillance at a locale which maintains daily driver logs proved to be a good strategy, as our Investigators were able to successfully quantify, and capture video evidence of all delivery loads made each day by drivers for the Sub-Contractor:
The new delivery data specifying trucks, dates, times and quantity
of deliveries, and the video evidence provided an accurate representation of the activity for these days. Investigators were then able to reconcile this activity against the truck slips approved by the General Contractor’s foremen for deliveries that had allegedly occurred at the site, and the invoices generated by the Sub-Contractor for these exact same days.
Once Criminal Histories were run on several individuals determined to be suspects, Texas Investigative Network, Inc. moved swiftly to schedule interviews of these same individuals. Extensive interviews of select General Contractor personnel, as well as drivers from the Sub-Contractor’s company were carried out and produced the following results:
The General Contractor Foreman – Investigators acquired an audio taped, hand-written and signed statement confessing to his nvolvement in this scheme; the Foreman was promptly terminated.
Key Driver for Sub-Contractor – Investigators acquired a hand-written and signed statement confessing to his involvement in this scheme; the driver was permanently removed from this job-site; The General Contractor executives subsequently received an offer for full restitution from an attorney representing this driver.
Sub-Contractor – Initially, this trucking broker defiantly denied having any knowledge or involvement in this scheme. Facing criminal prosecution by the Harris County District Attorneys’ Office, the broker eventually agreed to execute a promissory note payable to the General Contractor for an amount close to the actual loss amount.
