Ridgefield contractor pleads guilty to fraud

A Ridgefield man pleaded guilty to rigging bids on hospital and university projects and engaging in criminal fraud on insulation contracts, the U.S. Department of Justice announced last week.

According to the Department of Justice’s report, Michael S. Flynn pleaded guilty in Bridgeport Superior Court, marking the second conviction in an ongoing investigation.

Flynn, the co-owner of an insulation contracting business, conspired with other insulation contractors to rig bids and engage in fraud on contracts for installing insulation around pipes and ducts on construction projects at universities, hospitals, and other public and private entities in Connecticut, New York, and Massachusett, court documents showed.

Flynn was involved in the scheme from October 2011 and that continued until March 2018, the Department of Justice said.

Court records show that Flynn and his cohorts discussed prices and agreed on bids that inflated prices to their customers by at least 10 percent.

The Justice Department said that to conceal their actions, the conspirators perpetrated the bid-rigging and fraud schemes using burner phones and an encrypted disappearing messaging app, according to a release from the U.S. Department of Justice.

“Today’s guilty plea is the second relating to a $45 million scheme to cheat New England schools, hospitals, and other businesses by agreeing to fix prices on insulation contracts in violation of the antitrust laws,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “As this prosecution shows, the Justice Department and our law enforcement partners, including the FBI and DCIS, will use every available resource to detect and bring to justice individuals who attempt to hide their criminal conduct by using high-tech encryption apps, burner phones, or any other means.”

“This defendant profited handsomely by colluding with other insulation contractors and inflating bids on $45 million worth of insulation jobs,” said U.S. Attorney John H. Durham for the District of Connecticut. “The scheme victimized hospitals, universities and businesses throughout New England. I thank the FBI, DCIS, and the Antitrust Division for their ongoing efforts to bring the perpetrators of this brazen scheme to justice.”

The antitrust charge announced carries a maximum penalty of 10 years in prison and a fine of $1 million for individuals. The fraud conspiracy charge carries a maximum penalty of 20 years in prison and a fine of $250,000. The fines for the antitrust and fraud conspiracy charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

“Based on the great work of joint law enforcement efforts, the judicial system has clearly confirmed that crimes of deceit and fraud against hardworking members of our communities will not go unpunished,” said Brian C. Turner, Special Agent in Charge of FBI’s New Haven Field Office.

In addition to his guilty plea, Flynn has agreed to pay restitution to the victims and to resolve civil forfeiture cases connected to the criminal charges. Flynn agreed to settle the pending forfeiture action on his home for $327,500 and to forfeit all of his seized bank accounts.

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