The owner of Sonag Construction has agreed to plead guilty to fraud charges in a case that accused him of winning millions in federal contracts by exploiting a program set up to help disadvantaged businesses.
Federal prosecutors charged Brian Ganos, his business and others in April 2018 after a five-year investigation into a scheme that defrauded the federal government of more than $200 million by establishing a web of false companies in order to win set-aside contracts. Sonag and its related companies have won work on various prominent projects by exploiting bidding incentives meant to help companies owned by women, minorities and veterans, prosecutors argued.
Under the deal, Ganos will plead guilty to one count of wire fraud and another of mail fraud. Prosecutors will seek a prison term of 6 1/2 years and a fine of $5,000, although Ganos’ lawyers are free to argue in court for a lighter sentence. Four other people have already pleaded guilty to charges related to the investigation, including people who acted as owners of companies that Ganos secretly controlled.
Prosecutors meanwhile agreed to drop other charges against Ganos. Those were spelled out in a 24-count indictment, as part of the deal. Ganos also agreed not to contest the forfeiture of a Chevy Corvette, nearly $2 million in cash, a Colorado condo and the company’s offices on West Florist Avenue, all property investigators confiscated after the indictment.
The deal also imposes a $500,000 judgement on Ganos, to be paid through the sale of various assets discovered during the investigation, including an interest in two Disney timeshares, a 1967 Ford Shelby Mustang and three other vehicles.
Ganos also agreed not to challenge any agencies’ attempts to prevent him, or any entity he has an interest in, from winning government contracts in the future.
Although Sonag Construction appeared to be shutting down in late March as a result of the federal case, according to court documents, several affiliated companies are still operating without Ganos at the helm. Sonag Ready Mix, a concrete contractor, continues to operate after Ganos sold his stake in that firm in February 2018. By early April, Nuvo Construction, another firm linked to Ganos, was working to transfer its outstanding contracts to a company led by Nuvo executives, according to court filings.
Four other former false executives of Sonag-linked companies have pleaded guilty to federal charges in related cases.
James E. Hubbell, 50, of Sussex and Jorge Lopez, 57, of Worthington, Minnesota, have agreed to plead guilty to fraud charges for their roles as the phony owners of companies Ganos had set up. Telemachos Agoudemos, 43, of Big Bend, also pleaded guilty to a charge of lying to investigators.
Nicholas Rivecca Sr., of Hartland, who had previously served as president of Sonag Ready Mix, pleaded guilty to charges of conspiring to defraud the U.S. government. He also agreed to pay more than $600,00 to resolve a civil case accusing him of violating the False Claims Act in the straw-man-owner scheme.Follow @natebeck9