Firm, trade group that rigged bids to pay, announces AG Cooper
Release date: 12/14/2004
Raleigh: Environmental consultants charged with conspiring to rig bids and overcharge taxpayers for work cleaning land around leaky underground storage tanks must change their ways and pay more than $250,000 to the state, Attorney General Roy Cooper announced today.
“These groups cooked up a scheme to cheat taxpayers and make an unfair profit off of cleaning up our land and water,” said Cooper. “That isn’t the way we want to do business in North Carolina, and I hope this case sends a strong message to other firms operating in our state.”
According to agreements approved by North Carolina Business Court Judge Ben Tennille late yesterday, Mid-Atlantic Associates of Raleigh, its president and co-owner Darin M. McClure and its vice-president and co-owner Thomas A. Proctor are barred from rigging bids and submitting requests for reimbursement that fail to disclose kickbacks. Mid-Atlantic cannot bid on any contracts with the Department of Environment and Natural Resources for 18 months and will pay $180,000 to the state. McClure will pay an additional $60,000 and Proctor will pay $10,000.
The trade association North Carolina Environmental Service Providers Association (NCESPA) also entered into a settlement that bars it from helping firms conspire to rig bids and requires the group to pay $5,000 to the state. Individuals named in Cooper’s original suit against the defendants, or employed by a firm named in the action, may not serve as officers or directors of NCESPA. In addition, both NCESPA and Mid-Atlantic must develop programs to ensure that they comply with state and federal antitrust and deceptive practices laws.
The agreements announced today resolve charges against Mid-Atlantic, McClure, Proctor, and NCESPA first brought by Cooper in a suit filed in April 2003. Cooper and DENR alleged that eight firms and their employees illegally conspired to rig bids for a state contract in an effort to increase fees that the state pays for clean up of sites contaminated by leaking petroleum tanks. The complaint also alleged that the firms also formed the trade association NCESPA to direct either a boycott of specific state project bids or a submission of inflated rates, and that firms that bid also lied by swearing that they had not colluded with other firms to peg prices. An amended complaint filed by Cooper in November of 2003 added claims that Mid-Atlantic and McClure devised a secret kickback scheme to overcharge the state for work done by subcontractors.
At the time of the original complaint, six firms and six individual employees agreed to change their practices, cooperate in the state’s investigation, undergo ethics training and pay $480,000 to settle charges that they colluded to fix prices and lie on bids. With the settlements announced today, the total recovery for the state in this case is $735,000.
Approximately 10,000 sites across North Carolina have suffered environmental damage from leaking petroleum tanks. In June of 1988, the General Assembly created a trust fund with a portion of gasoline and kerosene taxes and tank fees to pay clean-up costs. When tank owners disappear or fail to clean up, DENR requests proposals from environmental consultants and the trust fund covers the cost. Using the fund, which takes in $30 million annually, the state also reimburses private landowners who clean land and water spoiled by leaking underground tanks.
Defendants named in the complaint that continue to face charges after the settlements announced today are: CBM Environmental Services of Fort Mill, SC and its owner and CEO Catherine A. Ross of Charlotte; and John A. Hill, a former director of NCESPA.