Monday, April 21, 2008

Inverness Man and His Engineering Firm Indicted in IDOT Fraud

Barrington area resident Kamleshwar Gupta and his firm, Kam Engineering (KEI) of Elgin, has been indicted by United State's Attorney Patrick Fitzgerald for overcharging the Illinois Department of Transportation by over $1 million from 1994 through 2003.

The State Board of Elections reveals campaign contributions to Rod Blagojevich, George Ryan, Jim Edgar, Judy Baar Topinka, Sid Mathias, and Jim Schmidt.

Blagojevich received $15,000 from 2002-2004.

Ryan got $6,200.

Mathias - $3,500 from 1999-2006.

Edgar got $5,500.

Schmidt - $500.

Judy Baar Topinka - $1,200, all in the 1990's.

A bookkeeper has apparently agreed to testify against Gupta.

This is the first indictment after Federal Appellate Court Judge Ann Williams' scathing and crystal clear opinion upholding the convictions of Mayor Richard Daley's patronage men.

If you were the U.S. Attorney's Office would you be interested in knowing how Gupta got convinced to contribute $3,000 on April 8, 2004, and, then, another $5,000 on the same day? And, five weeks later still another $5,000?

The press release, which follows, says Gupta faces 80 years in prison. He is 63.

Think it is “let's make a deal” time?

The U.S. Attorney's pres release follows:

ELGIN ENGINEERING FIRM AND ITS OWNER INDICTED FOR ALLEGEDLY
OVERCHARGING IDOT MORE THAN $1 MILLION DURING NINE-YEAR SPAN

CHICAGO – An engineering consulting firm in Elgin and its owner were indicted on federal fraud charges for allegedly overcharging the Illinois Department of Transportation more than $1 million while performing various jobs for the state agency between 1994 and 2003, federal law enforcement officials announced today. The defendants, Kamleshwar Gupta, and the engineering firm he founded and owns, KAM Engineering, Inc. (KEI), allegedly submitted false invoices and financial information regarding overhead expenses and the number of hours worked by KEI employees on contracts for IDOT.

Gupta, 63, of Barrington, and KAM Engineering, of Elgin, which has approximately 30 employees, were each charged with four counts of mail fraud in an indictment returned on April 17 by a federal grand jury in Chicago. The indictment also seeks forfeiture of more than $1 million in proceeds of the alleged fraud scheme. The charges were announced today by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Michelle McVicker, Special Agent-in-Charge of the U.S. Department of Transportation Office of Inspector General in Chicago; and Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

Gupta and KEI are scheduled to be arraigned on April 30 in U.S. District Court in Chicago.

According to the indictment, during a span of nine years, GUPTA and KEI fraudulently altered KEI’s timekeeping records by moving hours among different KEI jobs and contracts. The altered hours reported to IDOT fraudulently increased the amount of money that KEI billed to and collected from IDOT. Contrary to regulations applicable to IDOT contracts, Gupta and KEI caused employees to keep timesheets in pencil, rather than in ink, to facilitate fraudulent alterations of the employees’ timesheets.

The indictment alleges that Gupta directed Individual A, a bookkeeper, to falsely alter original employee timesheets. As a result, Gupta and KEI manipulated labor and overhead to increase the amounts that would be paid to KEI by IDOT, including by inflating the hours for which KEI could bill under contracts that paid KEI based on the hours worked, and by inflating KEI’s overhead costs. Gupta allegedly signed that fraudulent invoices that he directed Individual A to create.

The alleged scheme resulted in KEI overcharging IDOT a total of $1,069,293.44, according to the indictment. IDOT officials provided extensive assistance in the investigation after uncovering the alleged fraud scheme. IDOT’s responsibilities include administering federal and state highway funds in Illinois, including substantial funds from the Federal Highway Administration.

The Government is being represented in court by Assistant U.S. Attorney Christina Egan.

If convicted, each count carries a maximum penalty of 20 years in prison and a $250,000 fine. The Court, however, would determine the appropriate sentence to be imposed under the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

7 comments:

Anonymous,  6:32 PM  

Kam has been a thorn in IDOT's side for some time. Of course, now he will be suspended (again) and IDOT managers will once again be stuck with figuring out how to finish the projects that Kam started. If the selection of engineering firms were left to the local IDOT managers who have to manage the work, and not to the "selection committee" in Springfield, we would see a few less headaches at IDOT.

Anonymous,  8:22 PM  

What engineering company is Victor Reyes the lobbyist for that got state work that includes the Toll Authority?

Is Rod pay to play like George Ryana and the city is?

Anonymous,  6:37 PM  

Lon Monk will be indicted next.

Victor Reyes will probably be an informant.

Anonymous,  9:54 PM  

I've seen this kind of witch hunt before at another very politically connected minority downtown engineering firm.

After spending about $1 million in accounting and legal fees under similar claims, the firm was exonerated on all charges and simply tightened up some of its accounting practices.

I can't comment on the quality of the work of Kam, but I have seen much worse abuse in school design firms, where fees are jacked up at taxpayer expense in return for donations to school referendum funds.

One firm that did the design work at a $90 million community college expansion project "donated" $40K to the college's "foundation" which funded the tax referendum campaign.

If we're serious about cleaning up this kind of mess, we should simply prohibit firms who do public work from contributing to organizations and candidates who may require the businesses to "pay to play".

Like that's ever going to happen.....

Cal Skinner 10:36 PM  

Which college are you talking about?

Anonymous,  10:26 AM  

9:54

The Kam investigation is not a witch hunt. This guy has been playing this way for a while, through several administrations, and they are not exactly known for quality work. Yes, Kam is a minority firm, but I'd like to think it made no difference in the targeting of a federal investigation.

Anonymous,  8:27 AM  

Why it looks familiar to what happened to .......Manu Shah of Shah Engineering...

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