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An extensive list of money laundering and conspiracy indictments against a Monroe, N.C., construction company has not yet halted work on planned repairs to numerous crumbling roads in Lancaster County.
Boggs Paving Inc., which was awarded several paving projects earlier this year along Potter and Taxahaw roads in southern Lancaster County and all of Shelley Mullis Road in Indian Land, received a 29-count indictment from the U.S. Attorney’s office on Thursday, July 24, according to a Federal Bureau of Investigation press release.
The indictment, which charges the company, its president and several employees with government procurement fraud, was returned by a grand jury in U.S. District Court on Thursday, said Anne M. Tompkins, U.S. Attorney for the western district of North Carolina.
Despite the charges, Boggs Paving crews were seen Thursday afternoon in the midst of reclamation and repaving work along
According to the FBI release, Boggs Paving Inc., Carl Andrew Boggs III, 49, of Waxhaw, N.C.; Kevin Hicks, 42, of Monroe; Greg Miller, 59, of Matthews, N.C.; Greg Tucker, 40, of Oakboro, N.C.; John Cuthbertson (a.k.a. Styx Cuthbertson), 68, of Monroe; and Styx Cuthbertson Trucking Company Inc., of Wingate, N.C.; are charged with conspiracy to defraud the U.S. Department of Transportation, conspiracy to commit wire fraud, conspiracy to commit mail fraud, money laundering conspiracy, money laundering, and wire fraud during a 10-year time span and involving more than $87 million in government contracts. All the defendants except Tucker are also charged with mail fraud, the release said.
Investigators with the FBI, U.S. DOT and the Internal Revenue Service-Criminal Investigation Division, along with the U.S. Attorney’s Office, say beginning in 2003, Boggs Paving fraudulently obtained federally and state-funded construction contracts by falsely certifying that a disadvantaged or small business enterprise would perform and be paid for portions of the work on the contracts, the release said.
The indictment states Styx Cuthbertson Trucking Company Inc., a road construction hauler owned by John “Styx” Cuthbertson, was a certified DBE and SBE used by the defendants as a “pass- through” entity to obtain the contracts.
Through the investigation, authorities say they learned payments were run through a bank account in Styx’s name, but were then funneled back to Boggs Paving, which is not designated as a DBE or SBE, though that company did the actual work, the release said.
Other allegations made in the indictment include that the defendants made false statements to both the N.C. and S.C. Departments of Transportation on DBE applications, renewal statements and certifications, the release said.
Investigators say the defendants sometimes used magnetic decals bearing the “Styx” company logo to cover the “Boggs” logo on company trucks to create the appearance that Styx was the company performing the work, the release said.
Investigators say from June 2004 through now, Boggs Paving was the prime contractor on 35 federally funded contracts and a subcontractor for two contracts, all worth more than $87.6 million. Boggs paving claimed DBE credits of $3.7 million on these contracts for payments made to Styx, though Styx only received payments of $375,432 for actual work on these contracts, the release said.
Each count carries different maximum prison sentences, with the conspiracy charge carrying a max of five years, money laundering carrying 10 years, and money laundering conspiracy, wire and mail fraud all carrying a max of 20 years in prison, the release said. Each of the charges also carries a $250,000 fine.
The defendants are due for their first appearance in federal court on Aug. 20.
In February, SCDOT announced plans to rehabilitate portions of Potter and Taxahaw roads and all of Shelley Mullis Road. Boggs Paving was later awarded the contract.
After months of waiting by anxious motorists tired of dodging potholes and driving along uneven pavement, crews with Boggs began work last week on the first segment of the project, Potter Road.
Plans for the roads include grinding the worst stretches down to their bases, which will then be shored up and resurfaced with asphalt.
SCDOT District 4 Resident Engineer Greg Williams, who is overseeing the project and works in the Chesterfield County SCDOT office, said despite news of the indictments, work has not stopped on the company’s local road work.
“It’s still going and we’ve got Boggs working today on that project,” Williams said Thursday morning. “It hasn’t affected the work and we haven’t heard about any changes.”
He said Boggs crews began work last week on a 2.25-mile span of Potter Road, stretching from Camp Creek Road (Five Points) to the Pageland Highway (S.C. 9) intersection.
Williams projected the road could be finished by Monday, July 29, with Boggs crews then moving on to the next paving project along Taxahaw Road. The Taxahaw section runs about 3.4 miles from the area of Antioch Volunteer Fire Department near Flat Creek Road (S.C. 903) and Potter Road to Hinson’s Trading Post on Rocky River Road.
The plan is for Boggs to then finish its planned repaving of all of Shelley Mullis Road in Indian Land, a 2.5-mile stretch of road from U.S. 521 to the North Carolina state line.
“It’s the same paving process on all three roads and the initial schedule said it would be the end of August when they get to Shelley Mullis, though it may be a little sooner; it all depends on the weather,” he said.
Williams said the project as a whole includes a total of seven roads in Chesterfield and Lancaster counties.
Though Williams did not anticipate any work stoppages, he said the roads would continue to degrade if they are not taken care of soon.
“The roads aren’t going to get any better,” he said. “If they take the project from them, those roads are going to be dirt roads before long; they’re in that bad of shape.”
County Administrator Steve Willis heard the news Thursday, but said so far he hasn’t been notified of any changes to the company’s contracted work in the county.
“At this point in time – unless Boggs notifies us that something has happened to its operations – this hasn’t affected any of their smaller projects,” Willis said. “The project is being done with state DOT dollars, so they’d be the ones to say if there is a hold on the projects.”
If anything were to change and Boggs could not complete the work, Willis said it could take a significant amount of time to get the projects back on track.
“If we had to go back and rebid, by the time we got the contract documents done and the bids done, it’s so late in the season that we’d have to wait until next spring to start,” Willis said. “As temperatures go down, the crews are real tight on paving and it could 60 days to get the project going again.”
In June 2010, Boggs Paving was also contracted by the county to pave a portion of S.C. 160 in Indian Land, between Barberville Road and Possum Hollow Road.
In a statement released Thursday, Boggs spokesman Bobby Fisher reacted to the news of the indictments.
“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,” Fisher said in the release. “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.”
Contact reporter Chris Sardelli at (803) 416-8416