Federal investigators are seeking the forfeiture of more than $2.2 million from accounts of Milwaukee-based construction firm Sonag Co. Inc., alleging the money was received as part of a scheme to fraudulently obtain certain government contracts.
Investigators allege Sonag president Brian Ganos worked with other individuals to establish companies affiliated with Sonag to qualify for programs aimed at minority and service-disabled veteran business owners. The companies combined to fraudulently receive $268 million in contracts, according to a search warrant affidavit filed in August 2016.
Ganos has not been charged, but investigators have also seized a Colorado condo and a 2014 Corvette, alleging the purchases were funded with profits from the government contracts. Ganos denied the allegations in the affidavit supporting the seizure and argued the action’s should be dismissed “because a civil judgment and forfeiture would be constitutionally excessive.”
The proceedings for the condo and car were stayed pending the ongoing criminal investigation after government attorneys argued that discovery in the civil cases would potentially give Ganos an idea of the direction and scope of the investigation.
Michael Fitzgerald, Ganos’ attorney, did not immediately respond to a request for comment. He declined to comment to the Journal Sentinel, which first reported the seizure of Sonag funds.
The companies allegedly affiliated with Sonag include Trinity Marketing Services, Sonag Ready Mix, Sonag Electrical, Nuvo Construction, C3T and a number of property companies.
Sonag and Nuvo have done at least $10.3 million worth of work on projects that have small business enterprise targets like the Northwestern Mutual tower and new Milwaukee Bucks arena. The city of Milwaukee's Office of Small Business Development sought to deny Sonag and Nuvo certification for the SBE program earlier this year following the August 2016 search warrant.
Ganos appealed the decision, arguing no one named in the search warrant had been charged and none of the allegations had been proven. Sonag’s appeal was ultimately settled and the company is currently certified through April 2020. Sonag Ready Mix is also certified through August 2020. Nuvo’s appeal was denied.
In the most recent seizure filing, investigators allege $3.1 million in 2010 federal contract payments to Nuvo and C3T was moved to a Sonag account in 2011. Over the next five years, the complaint alleges the money was moved through four or five other accounts before it was ultimately seized in October.
FBI special agent Jennifer Walkowski alleged that the goal of the “layered financial transactions” was to conceal where the money came from, its location and “the true ownership of those criminally derived profits, namely, that those profits really belonged to Ganos as the orchestrator and prime beneficiary of the set-aside and money laundering conspiracies, and not to Sonag or others.”