Investigations

Frank S. Chuang of Wethersfield, CT, owner of two engineering and construction services companies, agreed to an $8.7 million settlement for defrauding the Department and four state transportation agencies on numerous transportation projects. Chuang pleaded guilty in U.S. District Court in New Haven, CT, by submitting fraudulent invoices to prime contractors, representing that his companies' employees performed specified work when they had not and inflating overhead by including on the payrolls people who were not employees. Chuang also pleaded guilty to tax evasion.

The investigation disclosed that Chuang defrauded the transportation agencies of Connecticut, Rhode Island, Massachusetts, and New York of approximately $2.7 million, which included a Federal share of $1.5 million. Under terms of the plea agreement, Chuang and his firm L-C Associates will pay $8.7 million in restitution, penalties, and damages, including $1.024 million in criminal restitution for fraud; $4.3 million in Federal income taxes, penalties, and interest; and $3.4 million in civil damages and penalties. Total disbursement to the state agencies is expected to be about $2.59 million. Approximately $1 million will be paid to the Federal Highway Trust Fund, with the balance going to the U.S. Treasury. OIG led this investigation, with assistance from FHWA, the Connecticut Department of Transportation, IRS, and the FBI.