Accountants indicted on claims they failed to report fraud at U.S. Signal
mlive.com | 5/6/08 | Nate Reens
GRAND RAPIDS -- Three accountants who allegedly helped former U.S. Signal executives cover up a kickback scheme face charges for concealing the mail fraud conspiracy.
The indictments of bit players William G. Reynolds, Mathias Metzger and Ryan C. Howe mark the first stemming from what federal authorities call a years-long scam that had the fiber-optic company honchos inflating construction costs for projects and bouncing the cash back to themselves.
Authorities said the scheme netted up to $5 million.
Court documents show Reynolds, Metzger and Howe worked for Turn-Key Network Solutions, and each spotted illegal activities tied to alleged crimes by Barry Raterink, Tim Hall, James Collins and Douglas Lautenbach.
Federal investigators say the accountants, each charged with a three-year felony, failed to notify authorities about a plot that allegedly had Lautenbach, the co-owner of Turn-Key with Raterink, inflating bids for U.S. Signal subcontract work.
Raterink, Hall and Collins, aware of the ruse, would approve the excessive payments to Turn- Key and funnel the excess money to fake companies that billed for phantom services, according to U.S. District Court records.
At the time of the allegations, Raterink was the company president, Collins was the company's engineering vice president and Hall was the operations director, all assuming responsibility for approving contracts.
None of the executives has been charged with crimes, but court records reveal they are cooperating and have had personal property seized by the government. Among the confiscated goods: Raterink's $328,000, 42-foot motor home and Lautenbach's 50-foot Sea Ray yacht.Collins secretly cooperated with FBI investigators by tape-recording conversations with the others, documents show.
In March, he also surrendered a $102,330 check that he allegedly admitted was part of his take in the scam. Records show he made nearly $300,000 over the course of the fraud, which began as early as 2003.
Assistant U.S. Attorney Michael MacDonald declined to comment on the case, citing an open investigation that could result in additional criminal charges.
A source with knowledge of the probe said there are ongoing negotiations over the amount of alleged swindled cash.
Larry Phelan, the defense attorney for Howe, said his client is cooperating with authorities.
Attorneys for Metzger and Reynolds could not be reached Monday, when all three were arraigned on the allegations. The trio of accountants did not profit from the scam, authorities said.