3 Paving Companies Plead Guilty to Bid-Rigging Scandal in Michigan

Three Michigan asphalt paving companies and six individuals have pleaded guilty in an ongoing federal investigation for rigging bids, while creating the false impression of competition, prosecutors say.

Pontiac, Michigan-based Asphalt Specialists LLC and its former vice president, Bruce F. Israel, and Taylor, Michigan-based Al’s Asphalt Paving Company Inc. and its president, Edward Swanson, pleaded guilty for its conduct on January 30. The co-conspirators rigged bids in each other’s favor from March 2013 through November 2018.

Asphalt Specialists and Al’s Asphalt also each participated in separate schemes with Clarkston, Michigan-based F. Allied Construction Company Inc. and its employees.

F. Allied, its former president, Andrew Foster, and its former vice president of estimating, Kevin Shell, pleaded guilty in August 2023 for their participation in the conspiracies with Asphalt Specialists from July 2017 through May 2021, and with Al’s Asphalt from June 2013 through 2019.

Each conspiracy operated in a similar fashion: the co-conspirators would predetermine who would win the contract and the others would intentionally submit non-competitive bids.

Asphalt Specialists was charged $6.5 million for its role in the conspiracy on August 15.

Al’s Asphalt pleaded guilty and was sentenced to pay a fine of $795,661.81 on July 31.

F. Allied also pleaded guilty and is awaiting sentencing. Foster and Shell face up to 10 years in prison and a $1 million criminal fine. The company could face up to a $100 million criminal fine. The Federal Highway Administration has barred F. Allied from participating in federally funded programs and projects.

Six individuals have been charged as part of the investigation. Not all individuals have been named.

“When companies choose to cheat rather than compete, they can expect to pay substantial, punitive criminal fines,” said Deputy Assistant Attorney General Manish Kumar of the Justice Department’s Antitrust Division. “The Antitrust Division and its law enforcement partners will not hesitate in our shared mission to ensure those who violate the antitrust laws do not benefit from their crimes, particularly when those crimes affect critical infrastructure for our country.”

“The sentence imposed today should serve as a significant deterrent for anyone who chooses corporate greed over open and fair competition for transportation projects,” added Acting Special Agent in Charge Anthony Licari Department of Transportation Office of Inspector General (DOT-OIG), Midwestern Region.

DOT-OIG and USPS OIG investigated the case. The Antitrust Division’s Chicago Office is prosecuting the case.