Boggs Paving CEO pleads guilty in minority contractor fraud - WECT TV6-WECT.com:News, weather & sports Wilmington, NC

Boggs Paving CEO pleads guilty in minority contractor fraud

Drew Boggs plead guilty in federal court Thursday, August 28, 2014. Boggs defrauded the government of $87 million in highway contracts reserved for companies using minority contractors. (Source: Davie Hinshaw | The Charlotte Observer) Drew Boggs plead guilty in federal court Thursday, August 28, 2014. Boggs defrauded the government of $87 million in highway contracts reserved for companies using minority contractors. (Source: Davie Hinshaw | The Charlotte Observer)
CHARLOTTE, NC (Michael Gordon/The Charlotte Observer) -

The president of a paving company accused of defrauding state and federal governments on $87 million in contracts for road projects pleaded guilty Thursday morning.

Carl "Drew" Boggs, president and CEO of Boggs Paving Inc. of Monroe, entered his guilty plea before U.S. Magistrate Judge David Cayer shortly after 10 a.m. at the federal courthouse in Charlotte.

Boggs and four employees were charged with receiving millions in federal and state highway contracts by exaggerating the role a minority-owned contractor played in the work.

All of the employees have now pleaded guilty. So has John "Styx" Cuthbertson, the CEO of a minority contracting firm in Wingate who joined the scheme. All await sentencing.

Boggs' plea came about two weeks before his case was to go to trial in federal court. He now stands to be the second generation of his family to be imprisoned on illegal road-building charges.

Andy Boggs, Drew Boggs' father, served a 60-day federal sentence in the early 1980s for rigging bids on North Carolina highway projects while working for another company.

In a sweeping indictment released in July 2013, Drew Boggs and the other defendants were accused of 29 counts of conspiracy to defraud the federal government, money-laundering, mail fraud and other charges.

All were part of what prosecutors described as a massive 10-year scheme to win government highway contracts in both Carolinas by misrepresenting the role that Cuthbertson's Styx Trucking Co. would play.

In some cases, company workers put Styx logos on Boggs' trucks. Prosecutors say millions of dollars paid to Styx Trucking were funneled back to Boggs' accounts.

With defense attorney and former federal prosecutor Ken Bell at his side, the towering Boggs pleaded guilty to two counts of defrauding the government and conspiracy to commit wire fraud and mail fraud. Together, the charges carry a maximum penalty of 25 years in prison and $750,000 in fine. Restitution, as of yet not determined, is also likely.

Assistant U.S. Attorney Jenny Sugar told the courtroom that if Boggs cooperates with prosecutors, they will recommend a maximum sentence of five years in prison.

The only remaining charges in the case are against the company itself, Boggs Paving Inc, which, according to some media reports, has won at least $200 million a year in South Carolina highway projects since 2008.

Before his hearing began, Boggs appeared relaxed at the defense table as he talked and occasionally laughed with Bell. But the construction company owner gave somber "yes, sir" and "no, sir" answers as he stood before Cayer while the judge questioned him about his plea.

At 10:22 a.m., Cayer arrived at a key point in his interrogation.

"Are you guilty of these charges?" he asked.

"Yes," Boggs said.

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