Two East Coast contracting firms have pleaded guilty in federal court to violating antitrust laws for their parts in a bid-rigging scheme that lasted nearly seven years, the U.S. Department of Justice announced recently.
BC Flynn Contracting Corp., an Oxford, Conn. mechanical contractor and Axion Specialty Contracting LLC, a mechanical insulation contractor in Foxborough, Mass., entered the pleas Aug. 3 in Connecticut, the DOJ announced the next day. In addition to admitting to antitrust law violations, BC Flynn also entered a guilty plea for engaging in criminal fraud, according to the announcement.
The companies admitted to conspiring with other firms and individuals to "rig bids on contracts for installing insulation around pipes and ducts on construction projects" in a scheme that ran from June 2011 until March 2018 and targeted public and private construction projects, such as universities and hospitals, in Connecticut, the DOJ reports.
“The plea agreements detail how the perpetrators submitted collusive bids and shared bid numbers with their competitors in an illegal effort to improve their companies’ bottom lines," Vanessa Roberts Avery, U.S. Attorney for the District of Connecticut, said in the report. "I commend the FBI and DCIS for investigating this scheme that victimized hospitals, universities and businesses throughout Connecticut.”
BC Flynn and Axion face maximum penalties of $100 million for the antitrust charges; the fraud charge against BC Flynn has a maximum penalty of $500,000, according to the DOJ; however, the fines could be increased if criminal gains or victims' losses are greater. The two firms have agreed also to pay restitution to victims, the report states.
Multiple agencies participated in the investigation into the bid-rigging scheme, including the DOJ's Antitrust Division's office in New York, the U.S. Attorney's Office for the District of Connecticut, the FBI's New Haven Division and the DCIS's New Haven Resident Agency, according to the report.
Antitrust Division Assistant Attorney General Jonathan Kanter said his office will continue to partner with those agencies to investigate and hold to account those who would defraud infrastructure projects.
“Construction and infrastructure projects — many of them funded in whole or part by taxpayers — deserve to have contracting processes that are fair and competitive,” Kanter said in the report.
BC Flynn and Axion are the sixth and seventh defendants to plead guilty in the ploy; four people and one company await sentencing, according to the DOJ.
“Free and open markets are the foundation of a vibrant economy," David Sundberg, FBI special agent in charge in New Haven, said in the report. "The FBI is committed to investigating perpetrators of antitrust and fraud crimes that corruptly limit competition in the construction sector.”
