20020672 Ver 3_Attachment 10 - 07-22-14 Boggs Paving official pleads guilty_20141124

CHARLOTTE —
Boggs Paving official pleads guilty to federal charges
Jul. 22, 2014 @ 04:24 PM
The former finance officer of Boggs Paving Inc. pleaded guilty to fraud charges in federal court Tuesday.
Kevin Hicks, 43, of Monroe, and former Boggs Paving CFO was charged last year with conspiracy to defraud the U.S.
Department of Transportation and one count money laundering conspiracy after an investigation by the FBI, USDOT and
the Internal Revenue Service.
Hicks is one of the eight defendants charged in relation to a $87 million fraud scheme involving government-funded
construction projects. Hicks pleaded guilty to one count of conspiracy to defraud the United States Department of
Transportation (USDOT) and one count of money laundering conspiracy.
Hicks was CFO for Boggs Paving and Boggs Group, and was in charge of Boggs Paving’s accounts payable and
receivable, job cost accounting, human resources and information technology.
According to court documents, from 2003 to 2013 defendants got federal and state funded construction contracts by falsely
stating that some contract work would be done by a disadvantaged business enterprise (DBE) or a small business
enterprise (SBE).
"The purpose of USDOT’s DBE program is to increase the participation of DBEs and SBEs in federally-funded public
construction and transportation related projects," stated a release by the FBI. "Styx Cuthbertson Trucking Company, Inc.
(“Styx”) is a road construction hauler owned by John Cuthbertson and based in Monroe, N.C. The company is also a
certified DBE and SBE. According to filed court documents, Boggs Paving and the defendants used Styx as a 'pass
through' entity to obtain the lucrative government-funded construction contracts."
Federal investigators argued that Boggs Paving officials ran government payments through a nominee bank account in the
name of Styx Trucking to make it seem like Styx Trucking was doing the work. Instead, the money was funneled back to
Boggs Paving and its affiliates. Investigators presented evidence that John Cuthbertson, owner of Styx Trucking, received
payments for allowing Boggs to use his company's name and DBE status.
Investigators also alleged that defendants put magnetic Styx Trucking decals on Boggs Paving vehicles to make it seem
like the trucking company was doing the work.
According to filed court documents and court proceedings, from June 2004 through July 2013, Boggs Paving was the
prime contractor on 35 federally funded contracts, and was a subcontractor for two additional contracts, worth over $87.6
million. Boggs Paving claimed DBE credits of approximately $3.7 million on these contracts for payments purportedly made
to Styx. Styx only received payments of approximately $375,432 for actual work on these contracts, court records show.
An October 2013 indictment also brought criminal charges against Arnold Mann, 55, of Fort Mill, S.C. Mann was a project
manager, estimator and area manager for Boggs Paving. His duties included bidding and managing municipal,
commercial, military, and North and South Carolina Department of Transportation projects. Mann pleaded guilty in June
2014, to one count of conspiracy to defraud USDOT.
Greg Tucker, 41, of Oakboro, and Boggs Paving’s project manager, estimator and vice president in charge of bidding on
federal construction projects in North Carolina, has also agreed to plead guilty to one count of conspiracy to defraud
USDOT. Tucker’s plea agreement was filed Tuesday and he is scheduled to appear in court Wednesday to enter a formal
plea.
The remaining defendants in the case are Boggs Paving Inc., Carl Andrew Boggs, III, 50, of Waxhaw, Greg Miller, 60, of
Matthews, John Cuthbertson, 69, of Monroe, and Styx Cuthbertson Trucking Company, Inc., of Wingate. They face
multiple charges including conspiracy to defraud USDOT, wire fraud and mail fraud conspiracy, wire fraud, mail fraud,
money laundering and money laundering conspiracy. Cuthbertson and Styx Cuthbertson Trucking are also charged with
one count of making a false statement on a loan application.
Both Hicks and Mann have been released on bond and will be sentenced by the court at a later date. The conspiracy to
defraud USDOT charge carries a maximum of five years in prison. The money laundering conspiracy charge carries a
maximum of 20 years in prison. Each of the charges also carries a $250,000 fine.
Boggs Paving is one of the companies contracted by the NCDOT to construct the Monroe Bypass.
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