The CEO of a prominent Charlotte-area road building firm will serve 30 months in a federal prison for his role in a minority-contractor scheme that earned his company almost $90 million in highway work that prosecutors said it would not have otherwise received.
Drew Boggs pleaded guilty last year to conspiracy to defraud the federal highway department and money laundering conspiracy. On Monday, U.S. District Judge Max Cogburn closed the books on the 2-year-old case by sentencing Boggs and three of his company’s top executives for their roles in the scam.
Over the past decade, prosecutors said, Boggs Paving received more than three dozen state and federal highway contracts across the Carolinas by exaggerating the role played by a minority-owned contractor – known in government parlance as a “disadvantaged business enterprise” or a DBE.
The company would have been disqualified from bidding on the jobs without promising that a minority contractor would get a share of the work.
Yet Boggs Paving came up with a way to circumvent the rules. Prosecutors say company executives bribed John “Styx” Cuthbertson, 70, the owner of a DBE trucking firm in Monroe, to take part in the projects by name only. To mislead government inspectors, Boggs paid millions to Styx Trucking that it secretly funneled back to Boggs’ accounts. At some sites, Boggs’ workers put Styx logos on Boggs’ trucks.
Now Boggs is on the cusp of becoming the second member of his road building family to be imprisoned for corruption-related charges. In the early 1980s, his father, Andy Boggs, spent 60 days in federal prison for rigging bids on North Carolina highway projects.
Because of the federal indictment, Boggs Paving can’t bid on state or federal contracts and Drew Boggs will be banished from his lifelong profession. Drew Boggs and his brother Chris, who was not charged with any crime, have each lost some $7.5 million since the 2013 indictment. Next year, when work on existing contracts ends, Boggs Paving will go out of business.
Defense attorney Ken Bell said after the hearing there is no evidence that Boggs Paving bribed Cuthbertson. The company employed 45 minority contractors on the projects, paying them more than the government required, the attorney said.
Despite the government’s repeated allegations, Bell said there is no evidence that the fraud was essential in Boggs receiving the highway contracts.
Bell urged Cogburn to choose probation over prison time and said his client has already lost millions because of the charges.
While Cogburn repeatedly pointed out that Boggs Paving’s illegal activity had not cost taxpayers any money, he said he had an obligation to protect the minority-contractor program. He ordered Boggs to serve 30 months but said he will not ask him to report until after the holidays. The charges carried a maximum penalty of 25 years in prison and $750,000 in fines.