For most public construction projects, the municipal, state, or federal government buys surety bonds to ensure that the project is carried out in a timely fashion. There are three types of surety bonds that are often required by the government: bid bonds, which guarantee that a contractor will complete the contract if it wins during the bidding process; performance bonds, which ensure that the contractor will complete its work for the price agreed upon at the outset; and payment bonds, which require the contractor and the surety company to pay laborers and suppliers for their work in completing the project.
A growing area of crime in Illinois and the U.S. as a whole is surety bond fraud, which involves claiming to have the authority to issue valid bonds. This crime is frequently prosecuted under federal wire fraud laws. If you are being investigated or have been accused of wire fraud, you should speak to a dedicated Chicago defense lawyer immediately.
Often, perpetrators will claim to have ties to another, more established surety bond issuer, including the industry giant Chubb. Those accused of surety bond fraud often print fraudulent surety bonds and forge officials’ signatures, finishing the counterfeit with an official-looking seal. Individuals and companies issue these false bonds, then collect premium payments from construction companies that defaulted on contracts with governments, calling in the companies’ debts at the higher rates agreed to in the surety bond. Beyond causing substantial financial losses, these schemes result in substantial delays for countless state and local projects. This behavior also allows unqualified and under-qualified construction contractors to receive contracts, which can compromise the whole process of bidding for projects.
Because of these consequences to governments and taxpayers, surety bond fraud is heavily investigated and punished. Usually, these cases are investigated by the FBI and the IRS, and for the most part, are prosecuted under federal wire fraud laws. At its core, wire fraud can be any plan to defraud someone that involves wire transmittal in interstate or foreign commerce. Any plan that uses the internet or phone lines to succeed can usually fall under the ambit of the law. Convictions can be met with sentences of up to 20 years in prison, as well as huge fines and restitution to the alleged victims of the fraud.
If you are being investigated for wire fraud or any other white collar crime, it is important to speak with an experienced defense attorney right away, before you speak with investigators. Goldman & Associates will aggressively defend you in the face of accusations of fraud. Contact our Chicago-area offices today for a free consultation.