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Last updated on Wednesday, March 12, 2014
(BLOOMINGTON) - Police says a recently fired Bloomington project manager is accused of scheming with the owners of Reliable Concrete Company to steal more than $800,000 from the city of Bloomington and then splitting the money among themselves over the past three years.
Longtime city employee 43-year-old Justin Wykoff, of Bedford, was arrested at his home Wednesday morning by federal agents and charged with 24 counts of embezzlement and one count of conspiracy.
He is currently being held in the Marion County Jail until his initial hearing before a federal magistrate this afternoon.
An investigation into city contracts for road work by federal officials revealed a conspiracy that bilked nearly $1 million from taxpayers. The money allegedly was diverted into the pockets of Wykoff and a father-son team, 52-year-old Roger Hardin and 25-year-old Zachary Hardin, of Bedford, who own Reliable Concrete Company.
The Hardins also were arrested Wednesday morning in Lawrence County and are being held for arraignment in federal court.
Steven DeBrota, the federal prosecutor in the case, said Wykoff could face up to 10 years in prison on each count and that the Hardins could face five years if convicted.
Investigators allege Wykoff approved false invoices submitted by Reliable Concrete Co. The result was that the city paid the company for work that was never done, and also for jobs actually carried out by other companies. The investigation indicated the concrete company sent false invoices to the city and that payment for the alleged services was deposited into the Hardins' bank account.
U.S. District Court: Criminal complaint
Official documents filed in case against say Wykoff accepted cash payments from the Hardins at least 24 times, receiving one-third of the amount. Police say the cash was a kickback Wykoff received in return for approving the fraudulent invoices.
The invoices were paid from May 13, 2011, through Feb. 14 of this year, according to a news release from U.S. Attorney Joe Hogsett, involving concrete for projects on Rogers Street and on College Avenue in Bloomington.
Improvement to sidewalks, curbs and driveways on College Avenue, between Second and Third streets, were handled by Reliable Concrete for a low bid of $32,870. The city supplied materials for the project, which means Reliable's costs were primarily labor, but the company's bid was more than $25,000 less than the second lowest bidder, Hostetler Concrete.
Groomer Construction quoted the project at $90,822.
Reliable Concrete most recently was awarded the 17th Street sidewalk project, from College Avenue to Madison Street, at a January Board of Public Works meeting. The contractor's estimate wasn't dramatically less, $108,962, compared to $132,394.88 from Groomer and $134,400 from Dave O'Mara Construction.
The investigation into corruption was conducted by the Bloomington Police Department, the FBI and the Monroe County Prosecutor's Office. Chief Deputy Prosecutor Bob Miller said his office was amenable to hand the case over for federal prosecution.
In April 2012, Hogsett and the FBI announced a joint effort to expose corruption in government. They formed the Public Integrity Working Group, PIWG, to rid the state of what Hogsett called a "culture of corruption."
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