Ganos receives 6.5-year sentence for contract fraud

Prosecutors allege a number of Ganos-affiliated companies operated from this building at the corner of North 55th Street and West Florist Avenue.

Last updated on March 17th, 2020 at 01:32 pm

Brian Ganos, the owner of Milwaukee construction firm Sonag Co., was sentenced Monday to 6.5 years in prison for his role in a scheme to fraudulently win government contracts intended for business owned by minorities and service-disabled veterans.

U.S. District Court for Eastern Wisconsin Chief Judge Pamela Pepper sided with prosecutors who recommended the sentence while Ganos’ attorneys argued for a 1-year to 16-month sentence for their client.

Ganos reached a plea deal earlier this year that tied him and his companies to fraudulently obtaining $69.2 million in contracts the Department of Veterans Affairs, Department of Defense and other purchase orders subject to disadvantaged business requirements.

Ganos admitted to creating new companies to pursue disadvantaged business certifications and contracts after his firm graduated a U.S. Small Business Administration program in 2003.

A 2016 search warrant affidavit for Sonag’s facilities and other offices originally identified $268 million in set-aside contracts Ganos and his related firms were able to fraudulently get.

“I think there are some who would argue this is a lenient sentence given the extent of the fraudulent conduct,” Pepper said.

While the case may not have the same obvious victim impact as a Ponzi scheme that took someone’s retirement savings, Pepper suggested the fact the businesses that qualified for the programs Ganos abused lost out on contracts shouldn’t be missed.

“What got lost is impossible to price,” she said.

Pepper said Ganos’ conduct undermined the programs’ goals of making sure everyone has a shot at winning government business.

“The reason for these programs … is because of the sense that in our country’s history those folks always haven’t gotten the same level playing field that everybody else has gotten when it comes to running a business and getting jobs,” she said. “That’s a pretty critical goal in a number of ways, but it can only work if the contracts go to the people for whom those programs were intended.”

Pepper said it was also frustrating that it appeared Ganos had the capabilities “to be a highly successful business man without doing all of this.”

In remarks to the court before his sentencing, Ganos apologized for his actions and said he is a blessed man with loving and supporting family.

“All I can do from this point forward is try be the best husband, father friend I can be and go from there,” he said.

In addition to the fraud case, Ganos was indicted in November on three counts of possession of child pornography. His trial is currently scheduled for early March.

Pepper approved a request to allow Ganos to report for his prison sentence after March 6 when the trial should be complete.

 

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Arthur Thomas
Arthur covers manufacturing for BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.