Paint-stripers sentenced in highway fraud scheme
Norwalk company worked in Ohio, Ky., W. Va.
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Staff report
The owners and operators of a pavement marking contractor that performed paint-striping services for the states of Ohio, Kentucky and West Virginia were fined and sent to prison.
Gerald E. Reichert, 65, and Adam M. Reichert, 36, father and son, were sentenced by Judge Jack Zouhary of the Northern District of Ohio, Western Division, Toledo, on Thursday, following their guilty pleas to conspiracy to commit major fraud against the United States, highway project fraud and wire fraud.
Gerald was sentenced to serve 16 months in prison, and to pay a fine of $90,000.
Adam was sentenced to serve eight months in prison, and to pay a fine of $70,000.
Both men were ordered to pay total restitution of $579,014.
The two defendants were owners and operators of Oglesby Construction Inc., a pavement marking contractor based in Norwalk, Ohio, that performed paint-striping services for the states of Ohio, Kentucky and West Virginia.
The men participated in a scheme to defraud state and federal governments by contracting with state authorities to perform paint-striping of roads using a certain amount of paint and glass beads, but then under-applying those materials and falsely informing states that they had complied with contractual requirements, the government said.
The scheme participants misled the states by either manipulating daily spreadsheet reports submitted to the states, or by attaching physical manipulation devices to application trucks including applicators and scales.
The case was investigated by the United States Department of Transportation, Office of Inspector General, and the FBI. The case was prosecuted by Assistant U.S. Attorneys Robert N. Melching, Jody L. King, Suzana K. Koch, and Gene Crawford.
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