DAYTON, OH – Demolition contractor Steve Rauch, Inc. has admitted to defrauding the City of Dayton through a scheme involving falsified paperwork related to a 2014 demolition contract, according to court documents unsealed this week. The company, based in Ohio, intentionally misrepresented the amount of work completed by a certified disadvantaged business to fulfill contractual obligations.
The case, investigated by the Environmental Protection Agency’s Criminal Investigation Division, revealed that Steve Rauch, Inc. was awarded a contract requiring a portion of the work to be sub-contracted to a certified disadvantaged business – in this instance, Green Star Trucking, Inc. This requirement aimed to promote inclusivity and opportunity for small, minority-owned, and women-owned businesses within city projects.
However, rather than legitimately utilizing Green Star Trucking for the agreed-upon work, Steve Rauch, Inc. colluded with the trucking company to fabricate documentation. Knowing they hadn’t met the sub-contracting requirements, Steve Rauch, Inc. requested Green Star Trucking falsely certify that they had completed and been compensated for additional work—worth several thousand dollars—that was never actually performed. This false certification was then submitted to the City of Dayton for payment.
The scheme allowed Steve Rauch, Inc. to illegally obtain funds while circumventing the spirit and letter of the city’s disadvantaged business program. Investigators discovered the fraudulent activity stemmed from a desire to appear compliant with city regulations without incurring the actual costs associated with fulfilling those requirements. The EPA’s involvement highlights the agency’s expanded role in investigating fraud related to environmental contracts and projects.
Penalties & Sentencing
On February 18, 2021, Steve Rauch, Inc. was sentenced to pay a $15,000 fine for violating Title 18 U.S. Criminal Code, specifically 18 U.S.C. 1349 (False Statements). Green Star Trucking, Inc., complicit in the scheme, received a $1,500 fine on April 30, 2021. While the fines represent a financial penalty, legal experts suggest the reputational damage to both companies could have far-reaching consequences, potentially impacting their ability to secure future city contracts.
Key Facts
- Defendant: Steve Rauch, Inc.
- Location: Dayton, Ohio
- Year of Offense: 2014
- Victim: City of Dayton
- Crime: Fraud, False Statements
- Statute Violated: 18 U.S.C. 1349
- Steve Rauch, Inc. Fine: $15,000
- Green Star Trucking, Inc. Fine: $1,500
This case serves as a stark reminder that attempts to defraud government programs, even those intended to foster economic opportunity, will be met with investigation and prosecution. The EPA continues to work with other federal and local agencies to ensure accountability in contracting and prevent similar schemes from occurring in the future.
Source: EPA ECHO Enforcement Case Database
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