Public Works Fraud – Contractors Sentenced

Two Southern California men were recently sentenced for engaging in fraudulent behavior in connection with public works construction at Camp Pendleton, a base just outside of San Diego.  For the article, click here.

The two men, Bayani Yabut Abueg, Jr. and Hugo Hernandez Alonso and each Presidents of construction companies, admitted to giving bribes to Nate Cervantes, aka the “Godfather of Camp Pendleton,” in exchange for lucrative government contracts.  According to the article, over the course of a few years, Alonso paid out $119,000 worth of bribes in exchange for at least 6 government contracts worth millions of dollars. Both men also admitted giving ‘kickbacks’ to subcontractors on these government contract jobs.  The “Godfather” was arrested in January and faces sentencing shortly.

Though a surety bond would not have prevented something like this from happening, it’s yet another reason that there are people out there willing to break the rules.  So while the bonds don’t protect against this type of illegal activity, a performance bond protects the government’s project, and a payment bond guaranties the subcontractors and suppliers are paid on these projects.  If a contractor is willing to risk his freedom to make some money, it’s safe to assume he’d stiff payment to his subs and suppliers if given the opportunity.  Without a payment bond, a subcontractor would have little recourse on a public works project.