State contractor pleads guilty to fraud in obtaining millions in taxpayer-funded contracts

March 28, 2013

Online Staff Report

CHICAGO — Illinois Attorney General Lisa Madigan (D) announced March 28 the former president of a Peoria, Ill., area construction firm pled guilty to fraud in a scheme to obtain millions in taxpayer-funded state contracts.

Thomas J. Williams, 81, the former president of the Peoria Heights-based Williams Brothers Construction Inc., pled guilty Wednesday afternoon, March 27, before Judge John Schmidt in Sangamon County Circuit Court to two counts of mail fraud. Williams admitted using a minority-owned business, BJB Enterprises in Peoria, as a front to obtain two state contracts in 2010 to restore the historic Lincoln Hall at the University of Illinois at Urbana-Champaign and to construct a new science complex at Southern Illinois University Edwardsville.

The felony conviction is the result of an investigation by the Attorney General’s Public Integrity Bureau, which Madigan created to uncover fraud, abuse and waste of government resources.

Madigan said Williams represented to the Illinois Capital Development Board that it would employ BJB Enterprises on the two projects to meet the state contracts’ requirements that a portion of the work be completed by minority-owned businesses. Madigan’s Public Integrity Bureau investigation revealed that BJB Enterprises did not do any work associated with the two contracts or provide any materials for the projects.

Williams Brothers used this subcontractor as a front to win significant state construction contracts,” Madigan said. “The company’s illegal acts denied legitimate minority-owned businesses from securing public contracts and defrauded taxpayers.”

Williams, of Peoria, was ordered to pay $1.5 million in restitution to the State of Illinois and sentenced to 30 months of probation. Williams resigned as president of the construction firm in February.

Madigan formed the Public Integrity Bureau and tasked it with using the tools afforded the office within statutory limits to uncover public corruption and enforce state law. Public Integrity investigations have led to the convictions of elected officials, public employees and government vendors — from an elected state representative and county state’s attorney to local officials, police officers and rank-and-file government workers — who used their positions for personal or political gain.

The Attorney General’s work to fight corruption has extended beyond the scope of her Public Integrity Bureau. During her tenure, Madigan’s office has investigated and prosecuted fraud against government programs, including child care, in-home care, unemployment insurance and student loan programs, Medicaid and state grant funding, and minority business fraud. The Attorney General took legal action to revoke the Emerald Casino license over deep concerns of corruption, and acted to deny taxpayer-funded pension benefits to federally convicted former governors George Ryan and Rod Blagojevich.

Madigan also created the new position of Public Access Counselor in her office to serve as a watchdog to public bodies that refuse access to public records. The Public Access Counselor reviews and resolves thousands of public record disputes each year, working to reverse Illinois’ long legacy of a lack of government transparency. Her office has continued this work in the state legislature by helping to draft the State Employees and Officials Ethics Act, tightening revolving door prohibitions on state employees and requiring greater public disclosure of Inspector General investigative reports.

Public corruption comes in many forms, whether it’s public officials misusing their position for personal gain, government agencies abusing taxpayer funds or government vendors unfairly obtaining public contracts,” Madigan said. “With the legal tools afforded to my office, I’ve fought to uncover corruption, increase accountability and restore the public’s faith in its government at all levels.”

Deputy Bureau Chief Mary Bucaro, Assistant Attorney General David Navarro and Associate Director James S. Dorger handled this case for Madigan’s Public Integrity Bureau.

Posted March 28, 2013

2 Comments

  1. State Tax Payer

    March 28, 2013 at 7:06 pm

    There is a larger picture that is being missed. It is especially concerning that the State of Illinois has allowed CMS certified “front” companies (MFBE) to exist and be used widely and openly with little consequence. It is the ‘elephant in the room’ at every pre-bid and seems to be sanctioned by lack of motivation of those who are charged with minority oversight and compliance at bid date. Instead of serving the community as the program was meant to do by forcing contractors to subcontract a certain percent of their work to firms owned by minorities and women, these certified companies are used as fronts to avoid loss of competitive control at bid date by the Contractor. By subcontracting to these independent third-parties, who carry only their name and their papered CMS certification for the value of the MAFBE minimum requirement, the bidder double-subs the noncompliant contactor through the CMS front company for the minimum amount to fulfill the MAFBE goal. Usually there is a fee paid outside of the contract for this service. Someone should push through a FOIA to get a registry of the MAFBE compliance and check these out. However; here is the rub… up to this point the State has been complacent to look at this as fraud. My guess is that it inflates the MAFBE compliance numbers and serves the need for the state entity that manages MAFBE to receive benefit by inflated compliance numbers. Call it what you want..it is legislatively sanctioned fraud in my book.

  2. SusanR

    March 29, 2013 at 10:47 am

    Ask yourself this….just what is the total percentage of minorities that work (legally) in the trades, let alone own their own business that support the trades? Not meeting minority requirements can be due to various reasons other than discrimination. First, there aren’t many minorities that work in the trades to begin with. Throw in companiea that drug test before hiring and you already have a limited base to draw from. And the key to surviving in any business is having good workers who can get the work done within cost and time frames so that your mark-up remains profit. So maybe the elephant in the room is actually the regulation itself in the first place. There will always be those who choose to take the low road, but be sure their choices will follow them and find them out, even when they resign from their company in their elderly age.

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