An attorney from McLean Virginia has recently been convicted of defrauding a construction company in Laurel County Kentucky. The construction company called Elza Construction LLC had relation with a planned project to build a “green recycling center”. Unfortunately, Elza Construction LLC lost $1.32 million plus several more million dollars in excavation and site preparation costs even though nothing was built at the site.
A Frankfort judge delivered a guilty verdict for 4 counts of wire fraud as well as 1 count of conspiracy to commit wire fraud.
The site where the green recycling center was to be built is owned by a company called Waste Not Technologies also known as Global Green Holdings. This company lied to the city of Manchester and contractors who wanted to work on the green recycling center.
Chief executive officer of Global Green Holdings David Bennett promised that 1,4400 jobs and millions in revenue would come from this project.
The scheme required contractors such as Elza Construction LLC to wire money to an escrow account instead of them getting a performance surety bond. Bennett then promised the money would be used to release financing for the project and then returned within 3-4 months.
Once he received the money, Bennett kept some for himself and then distributed some to his co-conspirators. Sadly, Elza Construction LLC never got their money returned. Bennett will expect to be charged with the maximum sentence of 20 years on each count of wire fraud plus 5 years on the count for conspiracy to commit wire fraud.
There are many reasons why contractors must have a performance surety bond. The mistreatment of Elza Construction LLC is a common example of what can happen if the right steps are not taken before beginning a construction project. If Elza Construction LLC had the performance surety bond in the first place, they would not have been taken advantage of.
More information on this story can be found here.