Former CEO to serve time, pay $1.2 million for bogus bonding scheme

By Land Line staff | Tuesday, August 11, 2015

The former chief executive of a California escrow company has been sentenced to more than five years in prison and must make restitution of more than $1.2 million.

Able Carreon, former CEO of Tripartite Escrow Corp. of Fresno, Calif., was sentenced Aug. 3 in U.S. District Court in Fresno for his role in a mail fraud and aggravated identity theft scheme involving surety bonds and government contracts, according to a news release from the U.S. Department of Transportation’s Office of Inspector General.

The investigation revealed that between April 2005 and May 2011 Carreon and Tripartite defrauded the United States and private companies by offering bonding services to prospective government contractors, the release stated. The services included false bid bonds to secure a bid on a government contract, and false performance and payment bonds to insure the work on a government contract.

As collateral Carreon pledged stock that did not exist, or that was worth substantially less than represented, or that was pledged across multiple bonds without full disclosure. He also used forged notary stamps and signatures and other forged signatures on the bond documents.

Once the false and fraudulent performance and payment bonds were accepted by the contracting government agency and the work began, the government would make payments on the contract to the contractor, including Carreon’s bond premium. Altogether, the U.S. and government contractors paid for false and fraudulent payments and performance bonds, at a loss of approximately $1.2 million.
 
Surety bonds are required for certain federal government contracts. The bonds compensate the government for the financial loss incurred if a contractor defaults. Under federal regulations, in order to be acceptable, the bonding company must pledge assets with a value equal to or exceeding the amount of each bond, and submit a sworn affidavit disclosing the identity of the surety and verifying the existence and acceptability of the assets.

Copyright © OOIDA

Comments