The owner of an insulation contractor has pleaded guilty to participating in a $45m bid-rigging scheme to inflate prices in Connecticut, New York and Massachusetts.
Scammers used "burner" phones and an app that encrypted and automatically deleted messages in their conspiracy to inflate prices for insulating pipes and ducts at universities, hospitals and other projects, the Connecticut District Attorney’s office said.
Michael Flynn, co-owner of BC Flynn Contracting Corporation, pleaded guilty in Bridgeport, Connecticut, for his role in multiple schemes to increase the prices by 10%. He is the second person to be convicted in the ongoing investigation.
"As this prosecution shows, the Justice Department and our law enforcement partners 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," said Makan Delrahim, assistant attorney general of the Department of Justice’s Antitrust Division.
BC Flynn Contracting has been involved in projects at Yale University, the University of Connecticut, UConn Health Centre, and the Yale Cancer Centre, according to its website.
The antitrust charge carries a maximum penalty of 10 years in prison and a fine of $1m. 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.
As part of his guilty plea, Flynn agreed to pay restitution to the victim, settle the pending forfeiture action on his home for $327,500 and to forfeit his seized bank accounts.
Image: Yale-New Haven Hospital in Connecticut (CC BY-SA 3.0)