Legal Troubles Follow Granite Mining Partner

Boggs Paving Faces Federal Indictment

WINNSBORO – As Rockton Thruway residents band together to seek assurances that the operators of a proposed granite quarry near their homes will be a good neighbor, reports surfaced last week that raised a red flag on the welcome wagon.

Winnsboro Crushed Stone, LLC submitted its application for a mine operating permit to the S.C. Department of Health and Environmental Control (DHEC) on March 13 (http://www.scdhec.gov/PublicNotices/Land/) for approximately 923 acres off Rockton Thruway. Last week, The Voice learned that one of the principals in company is facing a 29-count indictment by the U.S. Department of Justice for fraud.

Carl Andrew Boggs III and his paving company, Boggs Paving, Inc., and five alleged co-conspirators were charged last July with conspiracy to defraud the U.S. Department of Transportation (USDOT), conspiracy to commit wire fraud, conspiracy to commit mail fraud, money laundering conspiracy, money laundering and wire fraud for a scheme lasting more than 10 years and involved more than $87 million in government contracts, according to the U.S. Attorney’s Office of the Western District of North Carolina. Six of the seven defendants are also charged with mail fraud.

Dorothy Brandenburg, who has been the point person in the community activity opposed to the mine, said the Boggs indictment doesn’t bode well for future operations in Fairfield County.

“As a local resident, I realize that the integrity of businesses that are allowed to operate in Fairfield County is a direct reflection of the county itself,” Brandenburg, speaking on behalf of herself and not for the anti-quarry group as a whole, said. “Who we allow to operate today will have a lasting impact on our future. The affiliates of this new corporation have, in my opinion, already provided significant evidence that we can expect nothing more than broken agreements and questionable operations. By extension, I question the judgement of those around the county that are consciously working with someone bearing a record such as Boggs.”

According to allegations contained in the indictment, from 2003 to 2013 Boggs Paving fraudulently obtained state and federally funded construction contracts by falsely certifying that a disadvantaged business enterprise (DBE) or a small business enterprise (SBE) would perform and be paid for a portion of the work on such contracts. The indictment alleges that Styx Cuthbertson Trucking Company, a road construction hauler based in Monroe, N.C., and owned by Styx Cuthbertson, was a certified DBE and SBE used by the defendants as a “pass-through” entity to obtain state and federal contracts.

“To create the illusion that Styx was doing and being paid for the necessary work, the indictment alleges that, among other things, the conspirators ran payments through a nominee bank account in Styx’s name but funneled checks back to Boggs Paving and its affiliates, which were not DBEs or SBEs but were doing the actual work,” according to the U.S. Attorney’s Office. “. . . each time a deposit was made into the nominee account as supposed payment for construction work performed by Styx, a Boggs Paving employee would immediately cut a check from that Styx nominee account to the Boggs entity or another firm that had actually performed the work. In return . . . Styx Cuthbertson received a kickback for allowing his name and DBE status to be used by Boggs Paving.”

A spokesperson with the N.C. Department of Transportation (NCDOT) said Boggs currently has three contracts worth more than $10 million with the state. Two of those projects are nearing completion, while the third was awarded in March 2013 and got under way this month. Over the last five years, Boggs has been paid approximately $55.2 million for work with the NCDOT, the spokesperson said.

Since Boggs Paving has not been convicted, the spokesperson said, there is nothing in N.C. state law prohibiting the company from bidding on future state-funded projects.

“Boggs Paving has been indicted but not convicted of any charges, and there is not a state law that says the contractor has to be removed from a project,” the NCDOT said. “Our legal staff is engaged with federal authorities, remaining observant for any new developments. Should anything change, our legal team will advise what necessary action must be taken moving forward.”

The indictment also put Boggs Paving in hot water with the S.C. Department of Transportation (SCDOT), who since 2008 has handed Boggs Paving more than $200 million in contracts for road projects. Styx Trucking was also the designated DBE on 31 of the 93 S.C. projects. Last year, the Federal Highway Administration (FHWA) temporarily suspended Boggs and Styx from receiving any future contracts for North or South Carolina projects. A spokesperson for the SCDOT said none of the projects currently under way with Boggs Paving have been suspended, but that there were no new contracts in the Boggs pipeline. The suspension by the FHWA, handed down on Sept. 4, 2013, means Boggs Paving will not be allowed to bid on any federally funded projects while the case is pending, the SCDOT spokesperson said.

Boggs and his alleged co-conspirators were scheduled to appear in court last August. The case has since been continued until September, according to a Department of Justice spokesperson, with jury selection to begin Sept. 16. Phone calls to Columbia attorney Pete Strom, the lead attorney defending Boggs, as well as to Boggs Paving, were not returned at press time.

Adding to Boggs’ legal headache was a Notice of Violation (NOV) issued by the Union County, N.C. Department of Zoning for operating an illegal dirt dump site off Stallings Road near I-485 in Matthews, N.C. The NOV was issued on Feb. 27 to Stallings Farming LLC, a corporation that lists one of its principal managers as Monroe Bypass Constructors, whose registered agent is Carl A. Boggs III.

Stallings Farming has since filed for a text change for the regulations governing the stockpile of materials for highway construction projects, according to Brian Matthews, Executive Director of Union County’s Planning Department. The company has also filed for a hearing with the County’s Board of Adjustors for an interpretation of the zoning regulations.

“There is a hole in our provisions,” Matthews said last week. “There’s nothing to allow for a temporary stockpile of material for highway projects, and there should be.”

The hearing is scheduled for June, Matthews said. Meanwhile, the dirt pile remains. Questions to a spokesperson for Winnsboro Crushed Stone regarding how much of the LLC is currently owned by Boggs and whether or not Boggs intends to hold on to that percentage were not answered at press time.

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