Federal prosecutors have indicted five men, two women and two corporations, alleging they illegally won government contracts worth some $350 million by misrepresenting themselves as straw companies controlled by either low-income men and women or disabled veterans.
Most of the seven are from the Columbia area.
An 18-count indictment in the case charges that Thomas Brock, 49 of Camden; Jerry Eddins, 66, of Aspermont, Texas; Harry Michael White, 65, of Columbia; Cory J. Adams, 43, of Columbia; Tory Brock, 51, of Camden; Alfonza McCutchen Jr., 39, of Irmo; and Allison Amanda Sauls, 46, of New York, N.Y., secretly set up an interlocking set of businesses and conspired to defraud the federal government by falsifying their eligibility to get government contracts.
The conspirators also identified, created and recruited “businesses owned by qualifying minorities, women, veterans and disabled veterans” and “hid their roles in the companies from the Small Business Administration and the Veterans Administration,” the indictment states.
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“The defendants hid the fact that construction companies were not controlled by minorities, veterans, women or the disabled in order to receive the lucrative contracts,” a news release from the U.S. Attorney’s office in Columbia said.
The indictment made no mention of where the construction work was done or what kind of construction it was.
However, three sources familiar with the charges said that the construction projects took place both in and out of South Carolina, involved military and civil projects, including at least one project at the Savannah River Site. The projects were completed and were eligible for public money.
The conspiracy began in 2002 and lasted for years, the indictment states. Most of the defendants were in federal court Tuesday.
Under federal law, the Small Business Administration awards contracts to recipients who are economically disadvantaged, female and/or minority businesses. The Veterans Administration oversees programs to award contracts to businesses run by disabled veterans.
Eddins was the owner of several construction companies, Thomas Brock was Eddins’ associate and White was an accountant and financial adviser to Eddins and Thomas Brock, according to the indictment.
Tory Brock, whose relation to Thomas Brock is not clear in the indictment, won contracts with the government after certifying companies she controlled were eligible to get contracts under rules favoring companies controlled by disabled veterans and economically disadvantaged women, the indictment alleges.
McCutchen won SBA contracts after certifying he qualified as a “socially and economically disadvantaged person” and that he controlled a general contracting and landscaping company, the indictment states.
Thomas Brock, Eddins, White, Adams, Tory Brock and McCutchen fraudulently secured federal contracts “when they were not eligible to obtain those contracts,” the indictment states.
Eddins’ two companies, Automatic Cash LLC and EEC LLC, were also charged in the scheme. Automatic Cash is a financing company and EEC is a construction consulting company, the indictment states. The two companies were charged with “major fraud against the United States,” which carries a maximum fine of $10 million.
The defendants were arraigned Tuesday morning at the federal courthouse in Columbia before Magistrate Judge Shiva Hodges. She released all of them on their promise to show up for future court appearances.
Defendants who appeared in court Tuesday were each represented by criminal defense lawyers, most of them well-known.
Eddins was represented by former U.S. Attorney Bart Daniel, as well as by uncle-and-nephew lawyers Henry Taylor and Heath Taylor. White was represented by former assistant U.S. Attorney Joel Collins. Adams was represented by former S.C. House member and ex-president of the State Bar, I.S. Leevy Johnson. McCutcheon was represented by Joe McCulloch. Thomas Brock was represented by attorneys Bill Runyon and Eric Laquire of Charleston.
In an interview, Daniel, speaking for Eddins, stressed that his client is a responsible businessman whose companies did good work.
“All these jobs in the indictment were finished on time, within budget and had outstanding performance ratings – and there was no loss to the government,” Daniel said. He said the indictments contained no mention of poor quality work.
Tory Brock, who was not in court, is represented by former assistant U.S. Attorney Mark Moore. Sauls was not in court Tuesday. Court records do not list her lawyer.
Thomas Brock, Eddins, White, Adams, Tory Brock and McCutchen were charged with conspiracy to defraud the government. They face a maximum $250,000 fine and a five-year prison sentence.
Brock, Eddins, White and Sauls were charged with wire fraud. They could receive a maximum 20-year prison sentence and a fine of $250,000.