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How Frequent is Surety Bond Fraud?




Surety bond fraud has been in the news lately, especially in the Sacramento region.  A case involving $3.5 million dollars surfaced earlier this year, concerning bonds in place for water meter installation.  Unfortunately, the County of Sacramento was given fake Travelers bonds by a general contractor that was suppose to supply and install water meters in the Sacramento area.  The perpetrator was able to flee with over $1 million of the county’s money.1  The county was informed that suppliers were not being paid so they went to file a claim against the bond only to discover the bonds were not real.  Now, the County of Sacramento is left with no option but to pay out the contract again, which is a true waste of public funds.

In June 2008, a man in Maryland was able to write $533 million dollars in fake surety bonds over a three year period.1  He was sentenced to 10 years in a federal prison.  Also, in 2009 a woman from Louisiana was sentenced to 20 years in prison for selling contractors fake surety bonds.1  It is evident by these particular examples that surety bond fraud is common enough for contractors and project owners to be wary.  Given the current state of the national economy, many people are expecting the instances of surety bond fraud to increase because people are becoming more desperate to find jobs to keep their companies afloat.

1 “Stimulus Watchdog warns about Contractor Fraud” 14 Feb 2010. Sacramento Bee. 6 June 2010. <



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1 thought on “How Frequent is Surety Bond Fraud?”

  1. Mabel says:

    Appreciate the recommendation. Let me try it out.

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