Insulation contractor told to pay $1m to victims of bid rigging plot

An investigation by the FBI has led to seven individuals being sentenced for bid rigging in tenders to provide building insulation.

Michael S. Flynn was sentenced to 15 months imprisonment and told to pay $1,062,155 in restitution to victims after pleading guilty to a seven-year conspiracy with other insulation contractors. This involved rigging bids in tenders to install insulation around pipes and ducts at universities, hospitals and businesses in Connecticut. 

His was the last of seven sentences handed to contractors after an investigation into fraudulent contracts with the University of Connecticut, the City of Hartford, PepsiCo, Stamford Hospital, and Yale University.

The conspiracy began as early as June 2011 and ran until as late as March 2018, according to the US Department of Justice.

Flynn was a co-owner of BC Flynn Contracting Corp, and cooperated with individuals at Langan Insulation and Axion Specialty Contracting to share details of their respective bids in order to allocate contracts among themselves at higher prices than if they had been competing. 

The investigation was conducted by the Antitrust Division’s New York Office, the US Attorney’s Office for the District of Connecticut, the FBI’s New Haven Division, and the DCIS’s New Haven Resident Agency.

Vanessa Roberts Avery, US attorney for the district of Connecticut, said: “This defendant’s collusive conduct victimised hospitals, universities and businesses throughout Connecticut. This prison term and the penalties imposed on all individuals and companies involved in this scheme should deter others from engaging in such criminal, anti-competitive behavior. I thank the FBI, DCIS, and the Antitrust Division for their efforts in bringing these perpetrators to justice.”

The investigation was supported by the Procurement Collusion Strike Force, which provides training to agencies and government procurement officials on how to better deter and detect antitrust crimes. It has provided support on a number of recent bid rigging and procurement fraud cases, including:

• A Metropolitan Transportation Authority (MTA) employee who conspired to ensure his company won bids on numerous excess vehicle auctions conducted by the MTA.

• A construction company owner who installed a service-disabled veteran as the “ostensible owner” of the company in order to win government contracts.

• A US military contractor whose firm’s shoddy construction practices were responsible for a series of collapsed and failed buildings across Africa.