Flynn’s plea marks the second conviction in the ongoing investigation, which last month snagged Gary S. Devoe, a senior branch manager at Oxford-based BC Flynn Contracting Corp., of which Michael Flynn is principal.
According to court documents, from October 2011 through March 2018, Flynn conspired with other insulation contractors to rig bids and engage in fraud on contracts for installing insulation around pipes and ducts on construction projects at universities, hospitals and other public and private entities in Connecticut, New York and Massachusetts.
The conspirators discussed prices and agreed on bids that inflated prices to their customers by at least 10%. In order to conceal their actions, the conspirators perpetrated the bid-rigging and fraud schemes using burner phones and an encrypted disappearing messaging app.
U.S. Attorney John H. Durham for the District of Connecticut noted that the FBI and the Department of Defense’s Defense Criminal Investigative Service are also handling the investigation.
“Ensuring the integrity of the U.S. Department of Defense’s (DoD) procurement process is a top priority for the Defense Criminal Investigative Service (DCIS),” stated Leigh-Alistair Barzey, Special Agent in Charge of the DCIS Northeast Field Office. “Bid-rigging and fraud schemes, such as the ones in this case, can cause serious economic damage to the DoD’s resources, which ultimately harms the American taxpayer and the U.S. military.”
The antitrust charge carries a maximum penalty of 10 years in prison and a fine of $1 million for individuals. The fraud conspiracy charge carries a maximum penalty of 20 years in prison and a fine of $250,000. Those fines may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
In addition to his guilty plea, Flynn has agreed to pay restitution to the victims and to resolve civil forfeiture cases connected to the criminal charges. Flynn agreed to settle the pending forfeiture action on his home for $327,500 and to forfeit all of his seized bank accounts.