The owner of Evans Landscaping Inc. was sentenced in U.S. District Court Jan. 7 to 21 months in prison for defrauding the city of Cincinnati and other public entities through fraudulent small business contracts.
Doug Evans, 57, of Newtown, Ohio, and Jim Bailey, vice president of operations for Evans Landscaping, were convicted following a jury trial in December 2018. Evans Landscaping Inc. was also convicted of the fraud scheme.
The state of Ohio has established an Encouraging Diversity, Growth, and Equity program for economically disadvantaged businesses that are at least 51% owned and controlled by an economically disadvantaged person. The size of the business must not exceed the definition of a “small business.”
Evans Landscaping is an Ohio company headquartered in Cincinnati that performs demolition, site-work, grading, hauling, recycling and landscaping services. Given the size and ownership of the company, Evans Landscaping does not qualify as a small business enterprise.
In 2008, the defendants, along with others, established, controlled and operated a demolition company, Ergon Site Construction LLC, for the benefit of Evans Landscaping. Ergon’s president and owner, Korey Jordan, had no prior experience in the field but provided IT services for Evans Landscaping. Ergon, with the help of the coconspirators, fraudulently obtained a certification as an SBE contractor with the city of Cincinnati while concealing Evans Landscaping’s involvement in and control over Ergon. Ergon also fraudulently obtained a state of Ohio EDGE contractor certification as a minority-owned business.
Evans and Evans Landscaping provided startup funds to Ergon, prepared and filed the legal documentation to register Ergon as an LLC, created the company’s name and logo, ordered Ergon apparel and bought equipment labels with Ergon’s logo.
From 2011 through 2014, Ergon bid on and received more than 100 residential demolition contracts with the city of Cincinnati, totaling approximately $1.9 million, by leveraging Ergon’s fraudulent SBE status.
During the same timeframe, Evans Landscaping also bid on state demolition and construction projects by claiming Ergon would provide a percentage of the services and receive part of the funds to be paid.
Evans Landscaping, Doug Evans and Bailey were convicted of two counts of conspiracy to commit wire fraud and three counts of wire fraud.
Korey Jordan, president of Ergon; Maurice Patterson, former CFO of Evans Landscaping; John Dietrich, former CFO of Evans Landscaping; and Michael Moeller, former manager at Evans Landscaping, have pleaded guilty in relation to this case.