Former contractor indicted in $1.2 million fraud involving project at Mechanicsburg Naval facility
HARRISBURG, Pa – A former U.S. Navy contractor has been indicted and arrested for submitting False Statements to the government and defrauding his subcontractors out of $1.2 million involving a project at the Naval Support Activity facility in Mechanicsburg.
In an Indictment filed today by a grand jury in Harrisburg, Andrew Persaud, 43, of Mt. Holly Springs, was charged with making false statements to the government.
The Indictment alleges Persaud was the President and Corporate Director of Persaud Companies, Inc., a Virginia and Maryland based construction company that entered into a $4.4 million contract in 2011 to renovate warehouses at the Naval facility. Persaud hired approximately 17 sub-contractors to work on the project which began in May 2012.
In June and July of 2012 Persaud allegedly submitted invoices for progress payments to the Navy. In the documents Persaud certified that all of the subcontractors had been paid for their work on the project. Relying on the verity of Persaud’s representations, the Navy sent Persaud payments totaling $1,206,470 between June and August 2012.
By September 2012 most of the subcontractors had walked off the job site. The Navy terminated Persaud’s contract after it learned, contrary to Persaud’s certifications, that none of the subcontractors had received any payment for their work on the project.
Because the Navy had required Persaud to purchase a materials/labor bond, the subcontractors eventually received payments from the bond carrier totaling $1,281,753.
The Indictment alleges that the government is seeking forfeiture of the proceeds of the criminal conduct in the amount of $1,206,470.
No date has been set for Persaud’s arraignment on the charges.
If convicted, Persaud faces a sentence of up to 10 years in federal prison, a term of supervised release following imprisonment, and a fine.