Thursday, January 16, 2014

Two men sentenced in largest affirmative action fraud in US history

Two men sentenced in largest affirmative action fraud in US history

The US government gives preferential treatment to “black owned” businesses. This Soviet style discrimination literally invites people to commit fraud. Imagine the US government will puts out a contract for 20,000 TSA hats. Let’s say the 10th lowest bid is a “black owned business.” The Feds will pay extra to have the so-called “black owned business” make the hats. Then the owner of this “black owned business” simply contacts the owner of the company that placed the lowest bid. They pay that company to make the 20,000 hats and keep the difference for themselves. Affirmative action government contracts has resulted in flim flam “black owned business” who literally get paid by the Federal government to do nothing.
Two men have been sentenced for the largest case of fraud involving affirmative action government contracts in history. Notice they only received short prison sentences. 24 and 33 months in what will probably be one of the Fed’s nicest white collar prisons.
A third man was apparently sentenced yesterday, January 15th.
The U.S. Attorney’s Office for the Middle District of Pennsylvania announced today that Dennis F. Campbell, of Orwigsburg, Pennsylvania, and Timothy G. Hubler, of Ashland, Pennsylvania, were sentenced by the Senior U.S. District Judge Sylvia H. Rambo in Harrisburg in connection with their roles in what the U.S. Department of Transportation (USDOT) has called the largest Disadvantaged Business Enterprise (DBE) fraud in the nation’s history.
Campbell, Schuylkill Product’a Inc.’s (SPI) former vice president in charge of Sales and Marketing, was sentenced to 24 months’ imprisonment, $119 million in restitution to the USDOT, and two years’ supervised release. Hubler, SPI’s former vice president in charge of Field Operations, was sentenced to 33 months’ imprisonment, $119 million in restitution to the USDOT, $82,370 in restitution to the Internal Revenue Service, and two years’ supervised release. Both men were ordered to surrender to the Bureau of Prisons by February 17, 2014, to commence service of their sentences.
Campbell pleaded guilty to DBE fraud in 2008, and Hubler pleaded guilty to DBE fraud and tax fraud in 2008. Romeo P. Cruz, of West Haven, Connecticut, the former owner of Marikina Construction Corporation, the DBE firm that operated as a front for SPI to gain lucrative DBE contracts, pleaded guilty to DBE fraud and tax fraud in 2008 and 2009, and is scheduled to be sentenced on Wednesday, January 15, 2014. All three men cooperated with the government’s investigation that led to the conviction of the two former owners of SPI, Ernest G. Fink, of Orwigsburg, Pennsylvania, SPI’s former vice president and chief operating officer; and Joseph W. Nagle, of Deerfield Beach, Florida, SPI’s former president and chief executive officer.
Fink pleaded guilty to DBE fraud in 2010. Nagle was convicted after a four-week jury trial in 2012 of 26 charges relating to the DBE fraud scheme. No sentencing date has been scheduled for Fink and Nagle.
“The sentences handed down today, in what is the largest reported DBE fraud case in USDOT history, serve as clear signals that severe penalties await those who would attempt to subvert USDOT laws and regulations,” said Doug Shoemaker, OIG Regional Special Agent in Charge. “Preventing and detecting DBE fraud are priorities for the Secretary of Transportation and the USDOT Office of Inspector General. Prime contractors and subcontractors are cautioned not to engage in fraudulent DBE activity and are encouraged to report any suspected DBE fraud to the USDOT-OIG. Our agents will continue to work with the Secretary of Transportation; the administrators of the Federal Highway, Transit, and Aviation Administrations; and our law enforcement and prosecutorial colleagues to expose and shut down DBE fraud schemes throughout Pennsylvania and the United States.”
According to U.S. Attorney Peter J. Smith, the DBE fraud lasted for over 15 years and involved over $136 million in government contracts in Pennsylvania alone. SPI, using Marikina as a front, operated in several other states in the Mid-Atlantic and New England regions. Although Marikina received the contracts on paper, all the work was really performed by SPI personnel, and SPI received all the profits. In exchange for letting SPI use its name and DBE status, Marikina was paid a small fixed-fee set by SPI.


  1. Mr. Cruz of West Haven is probably the only black person doing time for this, certainly being the only one from Marikina Construction Corp. Hubler, Nagle, and Fink are German names; Campbell was an officer at a non-DBE company and he's going to jail. I'm not holding my breath for a more informative press release but for future reference we should have court documents to show who did what and who might have gotten away with more for political reasons. FWIW I don't question the truth of the guilty verdicts-- nor do I actually care aside from enjoying the faintest sense of smug satisfaction at the newest vindication of my prejudices.

    1. Update: Cruz may have qualified as a "Disadvantaged Black Enterprise" owner, but the FBI report neglected to specify that he is Filipino-- still a minority but without the same protected status as African-Americans. He will get a similar sentence to the others.

  2. This is business as usual. In the Atlanta area there are several front companies set up by black women (extra points for not only being black but female as well). All they have to do is visit a local politician, pay their "campaign contribution", and they are in business. What a deal!