TMCnet News
Paving a road of misdeeds: Three top LI asphalt paving contractors plead guilty to conspiring to rig bids on contracts that cost Brookhaven Town, Suffolk County millions(Newsday (Melville, NY) (KRT) Via Thomson Dialog NewsEdge) Dec. 23--Three of Long Island's leading asphalt paving contractors, whom law enforcement officials say are part of an "asphalt cartel," pleaded guilty Friday to conspiring to rig bids on contracts that cost Suffolk County and the Town of Brookhaven millions of dollars. The three pleaded guilty to two separate felony counts of conspiracy to commit mail fraud -- one each for rigging bids for Suffolk County and the Town of Brookhaven. The three are James Haney, 60, head of Suffolk Asphalt Supply of Westhampton and Hauppauge; William Louis Fehr Jr., 50, head of All-County Paving Corp., of Medford; and Frank Schambra, 74, head of Sundial Asphalt Co., of East Setauket. They each face 8 to 14 months in prison under the recommended federal sentencing guidelines. They also agreed to forfeit $2.3 million they received for the contracts and pay the county and town $326,000 in restitution, the estimated amount they received because of the bid-rigging. Officials estimated that they illegally increased the cost of asphalt through the bid-rigging by a cost of about $10 a ton. The inflated price they charged during the scheme from 2003 to 2005 ranged from $45 to $70 a ton. A fourth leader of the asphalt industry, William Fehr Sr., the head of Prima Asphalt Concrete Inc. and Pav-Co Asphalt, both of Holtsville, also was scheduled to plead guilty Friday, but his hearing was postponed because he is ill, according to prosecutors and court papers. The five firms also pleaded guilty to similar charges Friday. As a result, they will probably have to be sold because their principal businesses involve supplying asphalt and repairing roads for governments, sources familiar with the case said Friday. Federal, state, county and local governments for the most part bar people or corporations convicted of felonies from bidding on contracts. The corporations also face fines of up to $1 million. In entering his plea, Fehr Jr. told U.S. Magistrate William Wall in Central Islip: "I engaged in discussion with competitors in the asphalt business ... concerning one or more contracts to be awarded. ... These discussions were intended to restrict competition for these contracts or to fix prices ... " Haney and Schambra made similar statements. "Today's convictions are a victory for the people of Suffolk County and Brookhaven, who deserve honest prices and services from government contractors," said Roslynn Mauskopf, the United States attorney for the Eastern District. Schambra's attorney, Kevin Keating, of Garden City, said after the pleas, "Mr. Schambra is 74 years old and has had a good life. It is time for him to move on." The attorney for Fehr Jr., Ray Perini, of Hauppauge, declined to comment, as did Haney's attorney, Stephen Scaring, of Garden City. The federal prosectors in the case, Assistant U.S. Attorneys James Miskiewicz and Cynthia M. Monaco, also declined comment. "The county was a victim and we look forward to getting restitution," said Ed Dumas, a spokesman for Suffolk County. A spokesman for the Town of Brookhaven could not be reached. The defendants were overhead on wiretaps during a two-year FBI investigation discussing the bid-rigging scheme with informants, according to court records. TALE OF THE TAPE Excerpts from wiretaps recorded by the FBI between defendants and informants in the asphalt cartel case, according to court records. James Haney: "Never be a pig. I always tells everybody. Take 25 percent of everything, never 100 percent. ... That was my philosophy. Gimme 25 percent of anything. I don't wanna earn 100 percent of nothing, and I'm a happy camper." William Fehr Sr.: "If we're a team, a collective [asphalt] plant owner's team, all the plants are gonna share whatever there is. If there's 300,000 tons [of asphalt], you're supposed to get 30 ... you're gonna get 30. ... Better ... to do that than take 75 or nothing." Informant: [wants to submit a bid of $65 a ton for asphalt.] William Fehr Sr.: That's too low. William Fehr Jr.: That's too low ... Fehr Sr.: Too low. It's gotta be like at ... Fehr Jr.: Sixty-eight [dollars per ton] ... Fehr Sr.: We don't want a [price] war in Brookhaven. Informant: I just have a gut feeling [my partner's] gonna be [reluctant] ... Fehr Sr.: Well, it's up to you to scare 'em away. Informant: Oh, thanks! Fehr Sr.: Or [your] plant's gonna close. Informant: It's up to you to scare [him] away. Fehr Sr.: I'm trying. Informant: ... I don't have as good a scare tactic as you do, huh? Copyright (c) 2006, Newsday, Melville, N.Y. Distributed by McClatchy-Tribune Business News. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |