State contract agent gets prison time stealing federal, state highway funds

By Charlie Morasch, Land Line contributing writer | Monday, July 28, 2014

A former state contract agent used his power to acquire rights of way for state highway projects to steal nearly $1 million in federal transportation funds. Now he’ll be spending two years in federal prison after being caught in what investigators called a “pyramid scheme.”

According to the U.S. Department of Transportation Office of Inspector General, Michael W. Young worked as a contract agent for the state of Tennessee between 2004 and 2012. As part of Young’s duties, the Clermont, Fla., man purchased property rights of way for road expansion projects designed by the Tennessee Department of Transportation. Funding for the projects was provided by the U.S. DOT.

When Young notified the state that he’d reached an agreement with specific property owners, TDOT regularly sent him checks for the agreed upon purchase price.

“Young admitted that instead of using these funds to buy property for the State of Tennessee, he began diverting funds starting in 2004,” according to a DOT Office of Inspector General press release. Young used the money for personal and business expenses. He also paid property owners previously owed money in a manner similar to a pyramid scheme.

In 2012, an audit exposed the scheme.

Young was convicted on Feb. 14 in U.S. District Court in Nashville after pleading guilty to theft of federal funds and for laundering money from the theft. Young was sentenced July 15 to serve two years in federal prison.

The investigation was conducted jointly with the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigations unit. Assistance in the investigation also came from the Tennessee Department of Transportation Internal Audit Division.

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