Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Canadian CEO receives 63 month prison sentence in EPA fraud suit, (Aug 10, 2016)

By Greg Hammond, J.D.

John Bennett, a Canadian national and a former chief executive officer of Bennett Environmental Inc., was sentenced yesterday to serve 63 months in prison for participating in a conspiracy to pay kickbacks and commit fraud at a U.S. Environmental Protection Agency (EPA)-designated Superfund site. Bennett was indicted in 2009 along with two other individuals—Gordon D. McDonald and James E. Haas Jr.—for their roles in conspiracies related to contracts at the Federal Creosote site located in Manville, New Jersey (U.S. v. Bennett, Case 2:09-cr-00656-SDW).

In addition to the prison sentence, Bennett was also sentenced to pay a $12,500 criminal fine and more than $3.8 million in restitution. He was extradited from Canada to the United States in November 2014 to face trial. A jury returned a verdict in March 2016, finding Bennett guilty of conspiracy to commit major fraud against the United States and pay kickbacks.

The Justice Department Antitrust Division claimed that Bennett carried out the conspiracy by providing kickbacks to McDonald, the project manager at the Federal Creosote site, in order to influence the award of sub-contracts at the site and inflate the prices charged to the EPA by the prime contractor. The kickbacks included money wired to McDonald’s shell company, lavish trips and entertainment expenses, and personal gifts. As a result of the kickbacks, Bennett Environmental was fraudulently awarded tens of millions of dollars in soil treatment and disposal contracts at the Creosote site, and the company won contracts at higher prices than it would have bid, causing harm to the EPA, according to the Antitrust Division.

"Contractors cannot make payoffs to obtain government contracts," stated Acting Assistant Attorney General Renata Hesse for the Antitrust Division. "Today’s sentencing reaffirms the division’s dedication to prosecuting executives whose greed and illegal ploys undercut competition and defraud the United States."

In September 2013, a New Jersey jury convicted McDonald on 10 counts of the 12-count indictment. McDonald has since been sentenced to serve 14 years in prison and ordered to pay a $50,000 fine and make restitution totaling more than $4.3 million to victims, including the EPA. McDonald also was charged with accepting kickbacks from co-defendant Haas—a former representative of a subcontractor that provided common backfill, a type of soil material used to refill an excavation. Haas pleaded guilty in 2009.

Companies: Bennett Environmental Inc.

News: Antitrust AntitrustDivisionNews