Owner of Defunct Azteca Supply Co. and Her Husband Sentenced to Federal Prison in Connection with Minority Contract Fraud
|U.S. Attorney’s Office September 25, 2012|
CHICAGO—The owner of a defunct Chicago company once certified as a minority- and woman-owned business and her husband were sentenced to federal prison terms today in connection with public contract fraud involving projects at O’Hare International Airport and in the Village of Orland Park. Aurora Venegas, the owner of Azteca Supply Co., who pleaded guilty to mail fraud, was sentenced to 26 months in prison. Her husband, Thomas Masen, former comptroller and secretary of National Concrete Pipe Co. in Franklin Park, who pleaded guilty to lying to the FBI, was sentenced to 24 months in prison, following lengthy sentencing proceedings for both in U.S. District Court.
Venegas, 63, and Masen, 67, both of Naperville, were ordered to begin serving their sentences on December 4 and November 27, respectively. Venegas also was placed on home confinement during the first six months of two years’ supervised release. Venegas was ordered to pay $482,850 in restitution, and Masen was ordered to pay restitution of $450,000.
“It is an especially serious crime because it involves public money,” U.S. District Judge Robert M. Dow, Jr., said in imposing the sentences. “What Ms. Venegas was supposed to be doing, Mr. Masen was doing and, as a result, the work wasn’t being performed by a [legitimate] WBE or MBE,” Judge Dow said.
The judge ruled that the government met its burden in proving that Venegas engaged in a scheme to steer minority contracts through her company, which collected nearly $9.7 million in fraudulent payments while acting as a sham minority contractor on runway and restroom projects at O’Hare International Airport for the city of Chicago between 2001 and 2008. Venegas, whom the judge ruled did not merit credit for accepting responsibility in pleading guilty, had admitted only that she engaged in a $57,000 fraud scheme involving a landscaping project at a new Metra commuter rail station for the Village of Orland Park.
Court proceedings showed that, following a November 2007 interview with Venegas by an investigator with the city of Chicago’s Inspector General’s Office, Venegas, Masen, and others made it appear that Azteca maintained an inventory of concrete pipe at the National Concrete Pipe plant where Masen worked. Venegas staged Azteca’s warehouse to make it appear that she kept inventory of other products, and she asked to borrow inventory from another company so that if an inspection occurred, Azteca could falsely convey that it maintained products that it claimed to sell.
The sentences were announced by Gary S. Shapiro, Acting U.S. Attorney for the Northern District of Illinois; William C. Monroe, Acting Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; and Joseph Ferguson, Inspector General for the City of Chicago.
“Chicago’s M/WBE program is the very center of the city’s efforts to provide economic opportunity for disadvantaged communities. We will continue to work with our partners in law enforcement to ensure those who cheat the system are punished appropriately,” Mr. Ferguson said.
Azteca was certified by the city of Chicago as a minority business enterprise (MBE) and a women’s business enterprise (WBE). To obtain and maintain that status, Venegas falsely represented that she performed a commercially useful function; that she did not perform brokering services between Azteca and other companies; and that she was the only person who provided estimates for Azteca’s contracts. Based on Azteca’s status as a MBE and WBE contractor for the city of Chicago, Metra provided reciprocal status for its contracts.
Venegas learned from customers what supplies they needed and caused Azteca to act solely as a broker in shipping those items from actual suppliers to customers in violation of MBE and WBE contract requirements. Venegas and Azteca allegedly generated invoices to make it appear as though Azteca had complied with contract requirements when, in fact, Venegas and Azteca had played no role whatsoever.
Masen admitted lying to the FBI when he told agents that he did not direct Venegas and Azteca as to what Azteca should charge for certain goods sold to customers and how much Venegas should mark up those items. The government showed that Masen frequently interacted directly with Azteca’s customers and used Azteca as a “pass-through” to make it appear that customers were purchasing goods from Azteca when, in fact, they were purchasing goods directly from Masen’s company.
The government was represented by Assistant U.S. Attorneys April Perry and Paul Tzur.