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Construction Company Owner and Former Residential Facility Employee Indicted for Rigging Bids for Public Contracts
ALBUQUERQUE, N.M. – Alexander M.M. Uballez, United States Attorney for the District of New Mexico, Jamie DePaepe, Special Agent in Charge of the Department of the Interior (DOI) Office of Inspector General, and Andy Tsui, Special Agent in Charge of IRS Criminal Investigation Denver Field Office, announced that William Ross Badoni and Elroy Harry made initial appearances in federal court on April 27 and April 25 on an indictment charging them with conspiracy to commit federal program fraud. The indictment also charges Badoni with one count of committing theft or bribery concerning programs receiving federal funds and eight counts of laundering of monetary instruments. Badoni, 59, of Shiprock, and Harry, 59, of Aztec, will remain on conditions of release pending trial, which has not been scheduled.
A federal grand jury indicted Badoni and Harry on April 11. According to the indictment, Badoni was the owner and director of Badoni Construction Company, located in San Juan County. During the time relevant to the indictment, Harry was employed by Kinteel Residential Campus, Inc. (KRCI) as a maintenance supervisor. KRCI is a residential facility which offers free or low-cost housing and meal accommodations for students attending school in Aztec. As such, KRCI receives federal funds from the Department of Interior through the Bureau of Indian Education.
From about April of 2018 to June of 2019, Badoni and Harry allegedly conspired to falsify and submit to KRCI bids in the names of other construction companies in order to make it more likely that Badoni’s bids would be selected for KRCI construction projects. Harry also allegedly provided Badoni with non-public information about construction projects and the bidding process. In return, Badoni allegedly gave, offered, or agreed to give things of value, namely sums of money, to Harry. Once Badoni had won the initial award of construction contracts, Harry and Badoni allegedly worked together to increase compensation for Badoni by submitting fraudulent “change orders” for KRCI’s approval. Further, Badoni and Harry allegedly caused KRCI to issue new construction contracts on an urgent basis under false pretenses in order to justify deviating from standard policies and procedures relating to KRCI’s bidding process.
“This indictment shows IRS-Criminal Investigation’s commitment to ensuring fair and open competition opportunities for companies seeking to work with the federal government,” said Andy Tsui, IRS-CI Special Agent in Charge. “IRS-CI will continue working with our law enforcement partners to ensure an even playing field for those attempting to obtain federal contracts for their businesses.”
“The Department of the Interior (DOI) Office of Inspector General (OIG) is committed to protecting our Indian Country schools and dormitories, so the students receive the education and opportunities they deserve, and the educators and staff have the resources they need,” said Jamie DePaepe, Special Agent in Charge for the DOI OIG. “We will continue to work with our law enforcement partners to aggressively investigate fraud in DOI programs to ensure those who defraud DOI programs are held accountable.”
“We will ardently protect taxpayer dollars invested in our youth,” said United States Attorney Alexander M.M. Uballez. “Protecting the integrity of contracting processes involving federal funds helps make sure that when we invest in our communities, that investment pays off.”
An indictment is only an allegation. A defendant is presumed innocent unless and until proven guilty. If convicted, Badoni faces up to 20 years in prison and Harry faces up to 5 years in prison.
The Criminal Investigators Division of the U.S. Department of the Interior, Office of Inspector General investigated this case. Assistant United States Attorney Taylor F. Hartstein is prosecuting the case.
Former WVDEP Official Pleads Guilty to Theft of Federal Grant Funds
CHARLESTON, W.Va. – Jerry D. Elkins 54, of Danville, West Virginia, pleaded guilty to theft from programs receiving federal funds. Elkins admitted to fraudulently obtaining $94,197.93 of federal abandoned mine land (AML) remediation sub-grant funds while employed by the West Virginia Department of Environmental Protection (DEP).
According to court documents and statements made in court, from on or about April 2017 until on or about August 7, 2019, Elkins assisted an individual, A.K., and his company apply for and obtain an AML sub-grant. Thereafter, Elkins set up a shell limited liability company to receive a portion of the sub-grant award funds and created fraudulent invoices in an attempt to conceal the nature of the payments.
The DEP receives grant funding from the United States Department of the Interior Office of Surface Mining Reclamation and Enforcement (OSMRE) for accelerating the remediation of AML sites with economic and community development end uses. Since 2018, West Virginia has received $25 million in AML block grant funds. Numerous private entities apply to receive AML sub-grants, and the process for selecting projects to receive sub-grant awards is competitive.
On February 21, 2017, the DEP hired Elkins as a regional planner. Elkins’ duties included reporting to the DEP whether certain project proposals being reviewed for AML sub-grant awards were suitable and appropriate for the reclamation of old mining areas. Prior to joining the DEP, Elkins became acquainted with A.K, who resided outside of West Virginia and controlled various corporate entities. Elkins and A.K. had discussed A.K.’s intent to apply to the DEP for AML grants.
In the summer of 2017, A.K. and one of his companies applied for a DEP AML pilot program sub-grant, with a proposal to construct and operate a greenhouse that would produce commercial quantities of vegetables and fruits at a project site near Madison, West Virginia (the Greenhouse Project). Leading up to when A.K. applied for the sub-grant, Elkins agreed to assist A.K. with developing and submitting the Greenhouse Project application. A.K. compensated Elkins for those services.
Between on or about April 2017 and January 12, 2018, while Elkins was employed as a DEP regional planner, Elkins assisted A.K. and his company by collecting water samples, providing contacts for public support, offering his opinion and suggestions for improving the sub-grant application, and continuously monitoring the application’s status. Elkins admitted that he also contacted an individual to write the Greenhouse Project grant proposal for A.K., which was outside the scope of Elkins’ duties as a regional planner. Elkins also provided that individual with edits to the grant proposal. Elkins further admitted to enlisting two other local individuals to work with A.K. and serve as officers in one of A.K.’s companies.
In November 2017, Elkins submitted a report for A.K.’s project site, which was a prerequisite for A.K. to receive federal funds. In December 2017, Elkins told A.K. that Elkins would approve the proposed project site.
Elkins continued to assist A.K. after he was transferred from the regional planner position to construction inspector on January 12, 2018. Elkins’ duties as construction inspector included overseeing the later phases of AML projects, such as construction and earth moving. Elkins admitted that throughout July 2018, he communicated extensively via text messages with A.K. and other individuals associated with the Greenhouse Project about internal DEP deliberations and provided suggestions regarding the sub-grant. Elkins further admitted to pledging to undertake certain actions and make contacts on behalf of A.K.
In August and September 2018, Elkins registered a limited liability company, Wanaque, in Delaware and opened a bank account for Wanaque at a bank in Charleston, West Virginia, in order to receive and obscure payments from A.K. Elkins admitted that Wanaque had no other legitimate business purpose besides receiving funds from A.K. and A.K.’s companies. Elkins further admitted that he directed the creation of a third-party pay-bill account through Bill.com, a cloud-based payments platform, that was used to send invoices from Wanaque to companies under A.K.’s control.
From about October 19, 2018, through about August 7, 2019, Wanaque received $94,197.93 in electronic fund transfers and checks from A.K. and his companies. Elkins admitted that the $94,197.34 originated from the Greenhouse Project’s sub-grant reimbursements from the DEP and were ultimately diverted to him. Elkins further admitted that he had no right to receive those funds and fraudulently converted them to his own use. Elkins also admitted to taking steps to hide, conceal and cover up his activity and the nature and scope of his dealings with A.K. Those steps included failing to list his interest in Wanaque when he signed the federal OSMRE State Employee Statement of Employment and Financial Interest form on February 20, 2019.
Elkins is scheduled to be sentenced on October 12, 2023, and faces a maximum penalty of 10 years in prison, three years of supervised release, and a $250,000 fine. Elkins also owes $94,197.93 in restitution.
United States Attorney Will Thompson made the announcement and commended the investigative work of the U.S. Department of the Interior Office of Inspector General- Office of Investigations, the West Virginia Commission on Special Investigations and the West Virginia Department of Environmental Protection.
United States District Judge Irene C. Berger presided over the hearing. Assistant United States Attorney Holly Wilson is prosecuting the case. Assistant United States Attorney Kathleen Robeson made significant contributions to the prosecution.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:23-cr-78.
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