Theodore firm will admit to contracting fraud

Tuesday, August 01, 2006
By BRENDAN KIRBY
Staff Reporter
A Theodore contracting firm and two of its officers have agreed to plead guilty to falsifying reports on asbestos- and lead-removal jobs at military installations in Alabama, Florida, Mississippi and Georgia, authorities said Monday.

Federal prosecutors in Mobile, following a five-year investigation, charged Gulf Services Contracting last week with fraud related to 10 jobs it performed in the late 1990s and early part of this decade. Prosecutors also charged company president Michael Thomas Burge and Jonathan Valle, a company supervisor, with making false statements.

According to the allegations, the company used workers who were not qualified for lead and asbestos removal and then lied about the employees' identities on contracts that collectively exceeded $10 million. The charges were brought as part of an "information," a process in which a defendant agrees to plead guilty without a formal indictment by a grand jury.

Plea hearings have been scheduled for Aug. 14 and Aug. 15. Assistant U.S. Attorney Michael Anderson said prosecutors have agreed to recommend a sentence for Burge and Valle at the low end of advisory guidelines. The maximum penalty under the statute would be five years in prison, but the actual time will depend on what the judge determines after the U.S. Probation Office conducts a pre-sentence investigation. Anderson said the company also will pay a fine.

Federal court documents accuse the firm of providing false information on payroll reports and reports specifying the workers' qualifications. Anderson said the primary contractors on the jobs collected the information -- required by federal law -- from Gulf Services Contracting and forwarded it to the government.

"They knew the information contained in the reports was false," said Anderson, referring to Gulf Services Contracting. "They had people who weren't qualified and not able to do the job."

Anderson said investigators have not uncovered evidence that anybody was hurt by improper asbestos removal or disposal, although he added that it would be difficult to detect after the fact.

Michael Brown, the company's vice president, said Burge was traveling out West on Monday and was unavailable for comment.

"I'm not involved in that," said Brown, who added he joined Gulf Services Contracting after the reports were filed. "I have no comment on that."

Reached by telephone at the company, Valle declined to comment.

William H. Thompson of the Mobile area, who is now deceased, founded the company in 1989. Brown said that the company performs demolition work as well as asbestos and lead removal.

According to the allegations, Gulf Services Contracting submitted false reports related to the following jobs:

Naval Air Station Pensacola between June 8, 1999, and July 30, 1999. The firm was brought in for asbestos and lead removal by the primary contractor, which was hired to repaint a building. Gulf Services Contracting also performed work on the building between Sept. 30, 1999, and May 9, 2001, and worked on another building between Feb. 23, 2001, and Aug. 25, 2002.

Naval Technical Training Center in Pensacola from Sept. 30, 1999, through Jan. 4, 2001. The company was brought in for asbestos and lead removal as part of a project to repair several buildings.

Hurlburt Field in Pensacola from Sept. 29, 1999, through March 14, 2000. The firm was hired for asbestos abatement on a renovation project at a building at the facility.

Fort Gordon, Ga., from Sept. 23, 1997, through May 16, 2000. The firm performed asbestos abatement as part of an upgrade to the modular barracks building.

Fort Rucker in Alabama from Sept. 28, 1999, through Sept. 18, 2000. The company performed asbestos and lead abatement for a hangar renovation at Cairns Field.

Naval Construction Battalion Center in Gulfport from May 27, 1999, through Feb. 15, 2001. The firm performed asbestos abatement as part of renovations to a photo lab. The firm also performed asbestos and lead abatement at the base as part of a project to modernize the Bachelors' Enlisted Quarters from July 28, 2000, through May 24, 2001.

Eglin Air Force Base in Florida from July 17, 2000, through Sept. 4, 2002. The company performed asbestos abatement as part of a project involving the base's Hospital Energy Plant.

Anderson said the investigation began as an Environmental Protection Agency case. Later, the Defense Criminal Investigative Service -- the criminal investigation arm of the Defense Department's Office of Inspector General -- joined the probe along with the FBI and immigration investigators. He said there were indications Gulf Services Contracting hired illegal immigrants.

Anderson said the workers at the job sites did not match the identities of employees that the company included in reports. "We were seeing the same certificates and the same certificate numbers over and over," he said.

Anderson said the investigation took extensive time because of the massive amounts of paperwork involved. Law enforcement officials compared reports submitted by the company with internal company documents.

Doug Wethering, an official with the Defense Department's investigative service, said contracting fraud cases often are labor-intensive. "Two to five (years) is very typical for a complex fraud investigation. Anything less than that is actually atypical," he said.