This is another example of fraud affecting a school district - this one is in that pillar of honesty, Chicago. These examples are posted here to educate readers and encourage staff and elected officials of the Florida Lake County School District to support and implement fiscal and audit controls to prevent possible fraud.
In this example, a landscaping firm used a minority owned front firm to obtain over $18-million in business from a school district when the main firm was NOT minority owned. A way to prevent this is to implement strong due diligence processes to ensure all qualifications of a vendor are confirmed (which was apparently never done - possibly because the firm donated funds to politicians). But, after all, this was in Chicago!
Notice that the issue was investigated after the District Inspector General received a "tip". This could have been from a formal fraud reporting hotline, which Lake County School District does not have. (Fraud reporting hotlines as a detection and prevention technique are a future subject).
I would hate to be a politician that accepted donations from the Landscaping firm.
vj
Dated Sept. 28, 2006 and from
Contract fraud alleged
Minority firm a front, school officials say
By Tracy Dell'Angela
Tribune staff reporter
Published September 28, 2006
The case against Monahan's Landscaping Co. Inc., Rohar Trucking and Collins Maintenance also has been referred to the U.S. attorney's office as a criminal investigation, schools chief Arne Duncan confirmed.
Monahan's Landscaping has been paid nearly $18 million since 2000 to cut grass and maintain landscaping at some 600 schools. In recent years, Monahan's also has done about $8 million in work for the City of Chicago and the Chicago Park District.
The company is owned by Aidan Monahan, who since 1999 has donated tens of thousands of dollars to Democratic Party officials, including Mayor Richard Daley and Gov. Rod Blagojevich.
The investigation by the district's inspector general alleges that Monahan's had an "insidious" relationship with Rohar Trucking, which is owned by Roland Harper, a former fullback for the Chicago Bears.
Monahan's Landscaping performed all of the district's landscaping work from 2000 until 2003, when the district decided to set aside half of the business for minority- and women-owned firms. Monahan's retained half the contract, while the rest went to Rohar, a trucking firm that had never done any landscaping work. In the last three years, Rohar was paid $2.2 million by the district.
"There were allegations that Rohar was not doing any work on his contract," said schools Inspector General James Sullivan, whose office received an anonymous tip in May 2005. "We also found evidence that Monahan's employees helped Rohar with the bid documents."
The investigation, which included interviews with company employees and a review of bank records and bid documents, revealed that Monahan's employees performed the work on Rohar's contract, Sullivan said. Bid records indicate about 30 employees listed on Rohar's documents are also listed as Monahan's employees.
Sullivan said the investigation also revealed that Rohar opened a company bank account with a $100,000 check from Monahan's, and Monahan also personally signed about 100 checks written on the Rohar account.
Monahan's employees told investigators they helped Rohar complete bidding in 2003 and 2005, including the pages that set prices for the work. In a few cases, the same words were misspelled on both the Monahan's and Rohar bid documents, Sullivan said.
The third company, Collins Maintenance, became part of the case after investigators discovered two "unexplained payments" from Rohar totaling $132,402. The president of the company is Deborah Collins, Aidan Monahan's girlfriend, according to district officials.
"When you have this type of behavior, it robs legitimate minority firms of a critical opportunity," Duncan said.
Monahan, Harper and Collins could not be reached for comment Wednesday.
Rohar isn't currently working for the school district but is doing about $18 million in heavy equipment work as a minority subcontractor for Walsh Construction Co. of Illinois on the Dan Ryan Expressway reconstruction project.
Rohar used three different addresses in documents submitted to the district: Harper's home address in Algonquin, the Monahan's Landscaping office in Arlington Heights, and another Monahan-owned property in Chicago.
Collins Maintenance, incorporated in 2004, also has the same Arlington Heights address as Monahan's Landscaping. Collins does not have a contract with the district or the city, and it's not clear what kind of work the firm performs. Collins said she never did work for Rohar, while Harper reported that Rohar hired Collins' firm, Sullivan said.
The district is seeking to bar the three firms from working for Chicago Public Schools for at least the next three years. The district will present its case to an independent officer in a hearing tentatively set for January.
Copyright © 2006, Chicago Tribune
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