Dive Brief:

• A Pennsylvania contractor has pleaded guilty to paying bribes and kickbacks in order to win subcontracts at two New Jersey military installations, according to the Morning Call.
• Prosecutors said 54-year-old George Grassie paid bribes of $95,000 to $150,000 to a New Jersey U.S. Army Contracting Command employee in order to gain and keep subcontracts, and also provided $40,000 to $95,000 in kickbacks to employees of the general contractor. Both employees of the prime contractor have pleaded guilty to related charges.
• The conspiracy to defraud the U.S. and unlawful kickback charges carry a potential prison sentence up to 15 years, as well as massive fines. Grassie is scheduled to be sentenced on May 31.

Dive Insight:

Bribery and fraud cases are common occurrences in the construction industry, and military-based projects are no exception. In August, another Pennsylvania-based contractor pleaded guilty to fraud and receiving kickbacks on subcontracts that resulted in a $1.4 million loss for the government. Prosecutors said contractor James Conway, who was managing military construction work, issued sham contracts to companies that he owned and accepted payment for those contracts, even though little to no work was actually performed. Conway also allegedly took $180,000 in kickbacks from subcontractors who hoped to perform work on the projects Conway managed.

In another case last year involving work at a Pennsylvania Navy facility, contractor Anthony Persaud pleaded guilty to fraud after he allegedly did not pay $1.2 million in subcontractor bills and redirected the money instead to his own accounts. Prosecutors said Persaud falsely stated that he paid about a dozen contractors in full for the work they performed on warehouse renovations at the naval facility and submitted false reports attesting to those assertions. Persaud's bonding company was able to come through on the subcontractor payments. As part of his plea deal, Persaud agreed to make full restitution.