U.S. Attorney James Santelle announced today that Stephen VanderBloemen, managing partner of Waukesha-based The VanderBloemen Group, has been selected as the independent monitor to oversee Neenah-based Miron Construction Company Inc.
The arrangement is part of a non-prosecution agreement between the company and the U.S. government. Earlier this year Miron agreed to pay a $4 million fine to the federal government, promised to change its accounting practices and to operate under the oversight of an independent monitor to resolve an FBI investigation into allegations of obtaining funds from school districts by intentionally inflating the wages the company had paid its employees.
In a news release, Santelle said an in-depth analysis of five particular school district projects and a random sampling from a pool of approximately 150 total school projects “showed clearly that, when Miron billed school districts for ‘actual wages paid,’ contrary to the express language and terms of its contracts, Miron systematically and intentionally added not only overhead costs but also a hidden profit ‘multiplier’ totaling up to an additional 45 percent.”
Santelle said that VanderBloemen’s work will ensure that Miron ceases its practice of intentionally overbilling school districts in this manner.
Santelle said VanderBloemen would also be responsible for helping to ensure that Miron would no longer engage in “cost smoothing.” In the news release, he said the criminal investigation “revealed that Miron routinely transferred costs from less profitable projects to unrelated projects that could absorb the additional costs and still appear to be profitable. The result of this conduct was that all of Miron’s projects appeared profitable to outsiders. As revealed by the investigation, this ‘cost smoothing’ also allowed Miron to close the discrepancies in its accounting records that were caused by Miron’s inflation of labor costs in its bills to public school districts. Without ‘cost smoothing,’ Miron’s financial statements on the school projects could not be reconciled with its inflated school district billings.”
VanderBloemen has more than 43 years of experience in public accounting, including 41 years serving primarily construction contractors, construction suppliers, credit grantors to contractors, and construction industry associations.
