Bridge Contractor to Pay $55,000 to Settle Allegations of Overbilling
Kodiak Corporation (Kodiak), a bridge and roadway contractor, agreed to pay $55,000 to resolve allegations that it overbilled the Massachusetts Department of Transportation (MassDOT) for bridge repair and maintenance work. Kodiak also agreed to implement measures to prevent future overbilling. The terms are included in an Assurance of Discontinuance reached with Attorney General Maura Healey and Inspector General Glenn Cunha, filed in Suffolk Superior Court on January 21, 2022.
An investigation by the OlG’s Internal Special Audit Unit for MassDOT (ISAU) found that Kodiak overbilled MassDOT under four contracts for bridge repair and maintenance. The Commonwealth alleged that Kodiak charged MassDOT for items it was required to provide at no cost to the state, driving up the cost of the projects. On multiple occasions, Kodiak also double billed MassDOT by submitting the same invoices for reimbursement more than once. Kodiak does not admit to the Commonwealth’s allegations.
The OIG’s Civil Recovery Unit, in collaboration with the Attorney General’s False Claims Division, handled the settlement negotiations and civil recovery. In addition to paying $55,000, Kodiak must designate a contract manager to ensure that Kodiak only bills MassDOT for allowable expenses going forward and to train Kodiak employees about billing. Kodiak must also immediately notify MassDOT if it discovers any unallowed billing or overpayment. These measures will remain in effect for five years.
Independent Arbitrator Corroborates OIG’s Findings about Methuen Police Union Agreement
On January 7, 2022, an arbitrator ruled that a contract raising the pay of Methuen’s top-ranking police officers by as much as 183 percent was not binding on the city.
The arbitrator found the union’s chief negotiator, Police Captain Gregory Gallant, inserted language into the final draft contract that the parties never agreed to during negotiations. The arbitrator also found that Police Chief Joseph Solomon, who was on the city’s negotiating team, knew about Gallant’s changes but never informed city officials. The then-mayor, Stephen Zanni, signed the contract without verifying that it reflected the terms he negotiated.
The arbitrator’s findings paralleled those published by the OIG in a December 2020 report, which found that superior officers would get raises of between 35 and 183 percent under the terms of the contract. The arbitrator’s ruling upheld the city’s decision not to pay the excessive salaries. For more information, see the Office’s report on the Methuen police contract.
Former Transit Police Officers Pay Restitution for Time Theft
Following a joint investigation by the OIG, MBTA Transit Police Department and Suffolk County District Attorney’s Office, two former Transit Police officers were placed on pre-trial probation and have paid approximately $12,000 in restitution to the MBTA in connection with receiving pay they did not earn.
Kenneth Berg, a former lieutenant with the MBTA Transit Police Department, was charged in Boston Municipal Court (BMC) with larceny in connection with receiving $8,460.97 in pay for hours he had not worked. On December 22, 2021, a BMC judge ordered Berg to repay the MBTA and to serve three months of pre-trial probation.
Jason Morris, a former lieutenant with the MBTA Transit Police Department, was charged with larceny in connection with receiving $4,354.55 in pay for hours he never worked. On December 10, 2021, a BMC judge ordered Morris to repay the MBTA and placed him on three months of pre-trial probation.
Former MBTA Transit Police Sergeant Michael Adamson was also charged with larceny for allegedly collecting pay for hours he did not work. Adamson’s case is still pending.
All defendants are presumed innocent until proven guilty.
Taunton Man Charged with Pandemic Unemployment Fraud
On October 19, 2021, federal authorities arrested a Taunton man on charges alleging he filed fraudulent claims to obtain Pandemic Unemployment Assistance funds and made false statements to get a mortgage.
Clark Grant was charged with one count of wire fraud and one count of making a false statement on a loan application. The arrest resulted from a federal-state investigation involving the Massachusetts OIG, the U.S. Postal Inspection Service, the U.S. Department of Labor, Office of the Inspector General and the Internal Revenue Service's Criminal Investigations Division.
Grant allegedly filed a fraudulent application to obtain $67,950 in Pandemic Unemployment Assistance funds between May 2020 and September 2021 while working and collecting pay from his full-time job. Between May 2021 and July 2021, Grant allegedly made false statements to a mortgage lender in connection with a $410,000 mortgage loan.
Grant is presumed innocent until proven guilty.
Former CEO Charged with Stealing $1.5 Million from Shelter Provider
On September 27, 2021, a Suffolk County grand jury indicted Manual Duran, the former chief executive officer of Casa Nueva Vida, Inc. (CNV), a non-profit organization that operates shelters for families experiencing homelessness, for allegedly embezzling nearly $1.5 million from the organization. Duran’s indictment began with an anonymous tip to the OIG’s Fraud Hotline, which led to a joint investigation by the OIG and the Massachusetts Attorney General’s Office (AGO).
The grand jury indicted Duran on three counts of larceny over $1,200 by scheme, four counts of perjury and two counts of false entries in corporate books. The indictment alleges that from 2012 through May 2021, Duran stole nearly $1.5 million from CNV. CNV receives almost all of its funding through contracts with the Commonwealth to provide emergency housing assistance to families in Boston and Lawrence who are experiencing homelessness.
The criminal charges against Duran are pending in Suffolk Superior Court. He is presumed innocent until proven guilty.
Former Fall River Mayor Found Guilty of Fraud and Extortion, Sentenced to Six Years in Prison
On May 14, 2021, jurors convicted Jasiel F. Correia II, the former mayor of Fall River, of fraud, extortion and other charges in federal court in Boston. The charges resulted from a joint investigation by federal and state agencies, including the Massachusetts OIG.
Correia had been indicted in 2018 for defrauding investors in SnoOwl, a software application company he founded, for allegedly using a majority of investors’ money on vacations, entertainment and other personal expenses. A 2019 indictment leveled additional charges against the then-mayor, accusing him of extorting payments from people seeking approvals to open marijuana dispensaries in Fall River.
Following a 3-week trial, jurors convicted Correia on 21 of 24 counts, including extortion, extortion conspiracy and wire fraud.
On September 21, 2021, although dismissing 10 of the convictions, a federal court judge sentenced Correia to 6 years in prison, followed by 3 years of supervised release, for 11 of the criminal charges, including extortion and wire fraud. In addition, the judge ordered Correia to forfeit $566,740 to the government and pay $311,340 in restitution to four SnoOwl investors.
Two of Correia’s Co-conspirators Sentenced for Extortion
Two associates of former Fall River Mayor Correia were sentenced in federal court in Boston for their roles helping Correia extort money and property from business owners seeking to open licensed marijuana dispensaries in the city.
Defendant Antonio Costa pled guilty in September 2019 to two counts of extortion, two counts of extortion conspiracy and one count of lying to federal agents. On June 28, 2021, Costa received a sentence of 3 years of probation, with the first 15 months spent under home confinement with electronic monitoring. The judge also ordered Costa to forfeit $107,550 and pay a $10,000 fine.
Defendant Hildegar Camara pled guilty in September 2019 to two counts each of extortion, extortion conspiracy and making false statements to federal investigators. On July 21, 2021, the judge sentenced Camara to 3 years of probation, including 18 months of home confinement and 150 hours of community service per year while he is on probation.
The U.S. Attorney’s Office prosecuted these cases. The charges resulted from a joint investigation by federal and state agencies, including the Massachusetts OIG.
Former State Troopers Repay over $126,000 for Unworked Overtime
In July and August 2021, the OIG and the AGO reached settlements with nine former Massachusetts State Police (MSP) troopers to repay the Commonwealth a total of $126,610 for overtime they allegedly did not work. The troopers (Stephen Mihalek, Carlos Nunez, Keith Sweeney, Kevin Maple, Sean Hoye, Raymond Thompson, James Canty, Christopher Kudlay and John O’Grady) were members of the MSP’s now-disbanded Troop E, which patrolled the Massachusetts Turnpike. With these settlements, the Office recovered over $236,000 in 2021 from former MSP troopers for unworked overtime.
Transit Police Retirees Overpaid by More Than $470,000
On May 24, 2021, the OIG published a letter detailing its review of allegations that the MBTA Police Association Retirement Plan overpaid benefits to several retirees. During the investigation, the OIG found that the Retirement Plan had overpaid 24 retirees $470,217 in supplemental and disability retirement benefits.
The OIG determined that the Retirement Plan overpaid the retirees because it had poor internal controls and no system to track and terminate payments when retirees were no longer eligible. When the new executive director of the Retirement Plan discovered the overpayments, she put controls in place to ensure the plan pays the correct retirement benefits going forward. The Retirement Plan also entered into repayment plans with the retirees who received the overpayments.
Additional Resources
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| Date published: | February 25, 2022 |
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