Two convicted for fraud in $1.3M scheme
A former manager at an oil tank construction company and a former employee of a subcontractor have been convicted in federal court in Oakland of conspiracy and mail fraud in a $1.3 million invoicing scheme.
Kevin Laney, now residing in Three Forks, Montana, was formerly a senior project manager in the Pittsburg and Suisun City offices of Matrix Service Co. The Tulsa, Okla., company makes and repairs tanks for oil refineries.
Co-defendant Brian Frederico formerly worked for Imperial Shotcrete Inc. of Livermore, a subcontractor to Matrix that did concrete work on tank bottoms at Bay Area oil refineries.
Laney and Frederico were convicted by U.S. District Judge Yvonne Gonzalez Rogers in a written ruling issued on Thursday, following a three-week non-jury trial in her court in June.
The judge found both guilty of conspiring between 2006 and 2010 to commit mail fraud by submitting false invoices from bogus companies. Laney was also convicted of one count of mail fraud and Frederico of two counts of mail fraud.
Gonzalez Rogers wrote that Laney pocketed a total of $412,000 from the scheme and Frederico gained $875,000.
The judge said the two men and three other defendants “created a web of bogus corporations to funnel monies paid from Matrix contracts to their own bogus corporations.” One of the phony companies, created by Laney, was called Rogue Consultants.
Laney and Frederico will be sentenced by Gonzalez Rogers on Nov. 13.
The three other defendants, including former Matrix project managers Charles Burnette and Brandon Hourmouzus and Imperial Shotcrete co-owner Miguel Ibarria, each pleaded guilty to one count of conspiring to commit mail fraud. They testified at Laney’s and Frederico’s trial.
Matrix has reimbursed its clients $1.3 million “representing those amounts tainted by the self-dealings” of the defendants, Gonzalez Rogers wrote.
The investigation began after Matrix noticed suspicious billing by Burnette in the company’s Suisun City office in 2010, the judge said.