Sunday, June 12, 2011

Contractor Jailed for Fraud and Forgery

A contractor who had been debarred by the State of New Jersey from bidding on public works projects because of violations of prevailing wage requirements, was sentenced to four years in prison on June 10, 2011 for creating a stolen identity and forging documents.

Debarred in 2008:  In August 2008, Joseph Budis and his company, Murray Hill Equipment were debarred by the State of New Jersey for prevailing wage violations.  His other company, Murray Hill Enterprise, was debarred a month later. 

New Company Set Up With Alias:  But debarment didn't stop Budis from continuing to bid on public works projects.  His solution was to set up a new company, Murray Hill Historic Construction, using an alias - the name and Social Security number of an acquaintance on the contractor registration filing with the state.  With the new company, his real identity as a debarred contractor was shielded, and he figured he could continue bidding. 

Bidding With Forged Documents:  He did continue bidding on public works projects.  But to keep his true identity and the ownership of the new company a secret on the new projects, he submitted forged documents to public agencies he bid to.  
  • In one case, before his new contractor registration certificate had been issued by the state for fraudulently set-up Murray Hill Historic Construction, he forged the registration certificate to obtain a public works project.  
  • Then last year, he was the low bidder on a $673,240 dam and dike construction project in Clinton, NJ. The town awarded the project to him, unaware that the bid bond, performance bond, payment bond, powers of attorney, certificates of insurance, and notary signature on the bid were all forged. 
True Identity Exposed:  His scheme began to unravel in June 2010 when there was an accident on the Clinton job site.  To investigators, he claimed he was Joseph DeLia (his alias), but his driver's license - the one document he apparently didn't forge - reflected his real name, Joseph Budis.  Officials then realized that Joseph Budis was on the state's debarment list for prevailing wage violations.  It also came out that Murray Hill Historic Construction didn't carry workers compensation insurance for its workers, including the worker whose injury brought Budis' house of cards tumbling down.  The town of Clinton terminated his contract.

Indicted and Sentenced:  In October 2010, he was indicted in superior court.  Click here for a copy of the indictment.  On March 18, 2011, he pleaded guilty to two counts of making false representations on government contracts.  Finally, on Friday, June 10, 2011, he was sentenced to four years in prison, and ordered to pay $44,174 in restitution, and to pay an additional $250,000 as a public corruption profiteering penalty.  He and his companies were also debarred from public contracting for ten years.  Click here for a news story on the case.

Lessons Learned:  It doesn't happen often, at least not that I'm aware of, that contractors forge bonds and insurance documentation, although I have heard of a few cases.  If you have any questions about the validity of the documents, or you are not sure of who you are dealing with, you can always call the contractor's insurance broker and the bonding company to verify coverage. Fortunately, most contractors are honest and hard-working business owners, but this case does point out the need for public agencies to be diligent in checking out the credentials of low bidders.
Mike Purdy's Public Contracting Blog 
© 2011 by Michael E. Purdy Associates, LLC

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