Top Three Ways for Contractors to Score a Federal Indictment

First in a Three Part Series.

As if the threat of local or state licensure investigations is not enough to induce an instant case of irritable bowel syndrome for a contractor that just realized they unwittingly ran afoul of state regulations – or already knew and just got caught - contractors would be wise to recognize that their missteps could land them in even hotter water with the United States government.  There is a myriad of ways to invite a federal indictment on your construction project, but this series is limited to three of the most common construction related prosecutions by the Department of Justice.  We begin with a personal and professional carcinogen: illegal asbestos removal.

Most folks do not need a primer on the severe health risks associated with asbestos and the need to have it handled with educated care.  In the state of Florida that means not only making sure you have a specialized asbestos contractor license, but that you cooperate with government officials inspecting your work.  Whether due to ignorance or reckless disregard, owners, developers, contractors and their minions all too often ignore the risks and expose their workers and the public to otherwise avoidable and potentially disastrous health consequences.  While there are countless reports of federal prosecutions for improper asbestos removal, a Florida developer’s recent federal criminal plea deal and underlying indictment provides a representative overview of what not to do with asbestos and the hefty price that can be levied if you do it anyway.

In USA v. Philip J. Farley and Aurelijius Baltusis, 8:15CR-00133-RAP-MAP, and after already coughing up nearly $200,000 in local fines for improper asbestos removal, the two named defendants were indicted and arrested on multiple counts of criminal conspiracy and violating federal procedures. The indictment alleged the developer and his right hand man lied to county inspectors and failed to notify when certain asbestos-removal work was about to be done.  After three expensive years of criminal prosecution and interim appeals, the two pled guilty and were sentenced to probation, with Farley sentenced to 4 years federal probation and assessed an additional $250,000 fine.   A visit to the DOJ website or a random google search for “contractor, asbestos, federal indictment” will yield countless more examples of just how seriously the feds are prosecuting these cases in Florida and throughout the United States.

As most contractors know, Florida contractors must timely report their criminal convictions and pleas to their respective licensing board.  Compared to the shark attack of federal prosecution and bankruptcy inducing fines, one might be quick to dismiss attendant state administrative prosecution to a mere ant bite.  Escaping a live re-enactment of your own personal Shawshank Redemption is certainly cause for celebration.  Additional administrative discipline against your license, while perhaps comparatively tame, can nevertheless darken the day of a newly minted federal convict even further with not just additional legal expense, but memorable parting gifts ranging from a slap on the wrist with probation and fines to the gut-punch of  license suspension or revocation.  Whatever the add-on, you need no great imagination to figure out that neither licensure discipline nor a federal criminal record is going to help you beat out your competitor.

Coming up in Part 2, the Do’s and Don’ts of Working with DBAs.

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Shutts & Bowen, established in 1910, is a full-service business law firm with approximately 270 lawyers located in eight offices across Florida.

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