On April 21, the Third Circuit Court of Appeals affirmed the convictions of a painting subcontractor and its owner (defendants) under the federal wire fraud statute for conspiring to defraud the Department of Transportation (DOT) and the Pennsylvania Department of Transportation (PennDOT) by exploiting the DOT's disadvantaged business enterprise (DBE) program involving two Philadelphia construction projects. As explained below, the charges, conviction, and appellate opinion serve as a strong reminder to suppliers that they remain caught in the middle when their customers request to use a DBE as a pass-through for services on federally funded construction projects. [1]
The convictions arose out of the defendants' participation in two federally funded projects involving repairs to the Girard Point Bridge and Amtrak 30th Street Train Station in Philadelphia. Each project included certain DBE requirements, which the defendants intended to satisfy by purchasing paint supplies from Markias, Inc., a certified DBE. Markias, however, did not actually supply materials for either project (that is, Markias did not perform a commercially useful function). Instead, Markias merely "passed through" supplies from non-DBE paint suppliers to the defendants, adding a 2.25% fee to the suppliers' invoices for those materials. In exchange, the defendants issued two sets of checks to Markias: One check paid Markias its fee for acting as a "pass-through," and the second check paid the paint and...
Washington, April 27 Prominent television hosts and journalists have pushed back against online claims that the White House ... Washington, April 27 Prominent television hosts and journalists have ...