Pontiac and Taylor asphalt companies plead guilty to bid rigging in federal court

FOX 2 (WJBK) - Two Michigan asphalt companies from Pontiac and Taylor have pleaded guilty to rigging contract bids.

Asphalt Specialists LLC of Pontiac and Al’s Asphalt Paving Company Inc. of Taylor, and two executives from each company, admitted to conspiring to rig bids for paving service contracts.

According to court documents and proceedings, four defendants — Asphalt Specialists LLC, its former Vice-president, Bruce F. Israel, Al’s Asphalt Paving Company Inc. (Al’s Asphalt) and its president, Edward D. Swanson — conspired with each other and other co-conspirators to rig bids in each other’s favor from March 2013 through November 2018.

Asphalt Specialists and Israel also participated in a separate conspiracy with F. Allied Construction Company Inc. (Allied) and its employees from July 2017 through May 2021. Al’s Asphalt and Swanson participated in a separate conspiracy of their own with Allied and its employees from June 2013 through June 2019. Allied and two of its executives previously pleaded guilty in August 2023 for their participation in the conspiracies with Asphalt Specialists LLC and Al’s Asphalt.

Each conspiracy operated in much the same way: the co-conspirators coordinated each other’s bid prices so that the agreed-upon losing company would submit intentionally non-competitive bids. These bids gave customers the false impression of competition when, in fact, the co-conspirators had already decided among themselves who would win the contracts.

"Asphalt paving is a key component of our transportation infrastructure," said Deputy Assistant Attorney General Manish Kumar of the Justice Department’s Antitrust Division. "The division and our law enforcement partners will continue to prosecute corporations and individuals who undermine the competition that is crucial to responsible taxpayer spending and providing transportation services throughout Michigan."

"Through these guilty pleas, the U.S. Department of Transportation Office of Inspector General (DOT OIG) holds accountable two executives and two Michigan companies that engaged in this bid rigging scheme," said Special Agent in Charge Andrea M. Kropf of the DOT OIG, Midwestern Region. "We will continue to partner with our law enforcement and prosecutorial colleagues to pursue and prosecute those who attempt to stifle competition by violating federal antitrust laws."

"The Justice Department’s Antitrust Division, along with our other federal law enforcement partners, secured a victory today in our fight against bid-rigging and collusion," said Executive Special Agent in Charge Kenneth Cleevely of the U.S. Postal Service Office of Inspector General (USPS OIG). "The USPS OIG will vigorously investigate those who would engage in harmful anticompetitive practices and hold accountable those companies that subvert the competitive process for personal gain and corporate greed."

The defendants each pleaded guilty to two counts of violating Section One of the Sherman Act. The maximum penalty for individuals is 10 years in prison and a $1 million criminal fine. The maximum penalty for corporations is a $100 million criminal fine. The fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the maximum fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The Antitrust Division’s Chicago Office, DOT OIG and USPS OIG investigated the case, as part of an ongoing federal antitrust investigation into bid rigging and other anticompetitive conduct in the asphalt paving services industry.

The Justice Department’s Antitrust Division prosecuted the case.