Wednesday, October 28, 2020

Insulation business, owner pleads guilty for roles in bid-rigging and fraud


North Haven business Langan Insulation and its owner Thomas Langan of East Haven, pleaded guilty today in federal court for scheming to “rig bids in violation of the antitrust laws and engage in criminal fraud on insulation contracts, bringing the total to five convictions in this ongoing investigation,” the Department of Justice announced.

According to court documents, from October 2011 until March 2018, Langan Insulation and owner Langan 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.

The conspirators discussed prices and agreed on bids that inflated prices to their customers by approximately 10 percent. In order to conceal their actions, the conspirators perpetrated the bid-rigging and fraud schemes using phones for which the registration masked the identity of the users and an encrypted disappearing messaging app.

According to the DOJ, the antitrust charge announced today carries a maximum penalty of 10 years in prison and a criminal fine of $1 million for individuals, and a criminal fine of $100 million for corporations. The fraud conspiracy charge carries a maximum penalty of 20 years in prison and a criminal fine of $250,000 for individuals, and a criminal fine of $500,000 for organizations.

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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, DOJ officials said.

Langan and his company have agreed to pay restitution to the victims, federal prosecutors said.

Thomas Carson, spokesman for the Connecticut US Attorney, told Patch sentencing is scheduled for April 27. Both Langan, who as been out on a personal recognizance bond, and Langan Insulation agreed in part to pay restitution of at least $250,000, but Carson said the court will decide the final amount.

“Today’s two guilty pleas, from a company and its senior executive, underscore our ongoing efforts to hold companies and individuals accountable for engaging in bid rigging and fraud,” Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division said. “We will aggressively pursue and hold accountable those individuals and entities who inflict millions of dollars in harm, particularly on vulnerable institutions, such as taxpayer-funded schools and hospitals, and other businesses.”

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The ongoing investigation is being conducted by the Antitrust Division’s New York Office, the U.S. Attorney’s Office for the District of Connecticut, the FBI’s New Haven Division, and the Defense Criminal Investigative Service.

“Bid rigging and other violations of antitrust laws seriously damage the integrity of the U.S. Defense Department’s procurement process,” Special Agent in Charge Leigh-Alistair Barzey of the Department of Defense OIG’s Defense Criminal Investigative Service, Northeast Field Office said.

“The guilty pleas announced today are the direct result of a joint investigative effort and demonstrate the DCIS’ ongoing commitment to work with the USAO-CT and the FBI to investigate and prosecute individuals and companies that engage in criminal conduct that undermines the competitive bidding process.”

Anyone with information in connection with this investigation is urged to call the Antitrust Division’s New York Office at 212-335-8000.

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