Just two weeks after being charged in U.S. District Court with scheming to defraud its workers of wages earned and required union pension fund contributions, two high-ranking officials of the construction firm in charge of Riverside’s downtown streetscape makeover have pleaded guilty.
Joseph Lampignano, vice president of A Lamp Road Builders, entered a plea of guilty to one count of mail fraud on June 3 in front of Judge Sara Ellis. Giovanni “John” Traversa, the company’s general superintendent, pleaded guilty to lying to federal investigators.
According to the plea agreement filed by the court, the maximum penalty for mail fraud is 20 years in prison and a maximum fine of $250,000, but federal sentencing guidelines suggest prosecutors will seek between 51 and 63 months of jail time for Lampignano.
The plea agreement states that, prior to sentencing, Lampignano must pay $64,000 in restitution to 11 laborers from whom he sought kickbacks after A Lamp settled a prior civil lawsuit, forcing the company to pay back wages and pension benefits related to the fraud scheme.
Likewise, the maximum prison sentence for lying to federal agents is five years and a $250,000 fine, but Traversa’s plea agreement suggests that prosecutors will ask for a prison sentence of between 12 and 18 months and a $3,000 fine.
The sentencing guidelines, however, are advisory, and both men could avoid prison all together.
Prosecutors called out both defendants’ quick pleas, which avoided preparation for trial, and their “recognition and affirmative acceptance of personal responsibility for their criminal conduct” as mitigating factors in sentencing.
Between 2008 and 2013, Lampignano skirted prevailing wage laws by underpaying laborers and making less-than-required contributions to the union pension fund. State law required A Lamp Road Builders to pay union-scale wages to laborers working on multi-million dollar government projects.
Lampignano schemed to pay less than union scale by over reporting the rate paid to workers and under reporting the number of hours they worked. In total, Lampignano under paid workers and the pension fund by $2.6 million between 2008 and 2013, according to the plea agreement.
In 2013, A Lamp Road Builders settled a civil lawsuit related to the scheme, agreeing to pay about $1.5 million in unpaid wages and pension benefits. While that money was paid out per the agreement, Lampignano sought $140,000 in kickbacks from some of the 24 workers who were paid the back wages as part of the settlement.
Lampignano provided Traversa with a list of names and the amounts he wanted those workers to repay, according to the plea agreement. Workers kicked back $64,000 to the company.
But in January 2014, when agents from the FBI and the U.S. Department of Labor’s Office of the Inspector General interviewed Traversa about the kickback scheme, he lied about his role.
Both men posted $4,500 bond and await sentencing on Sept. 20 at the Everett M. Dirksen United States Courthouse in Chicago.
Lampignano’s attorney is Joseph J. Duffy, probably best known for defending former Gov. Rod Blagojevich’s political fundraiser Antoin “Tony” Rezko, who was convicted in 2011 of extorting money from companies who wanted to do business with the state.
The case is not related to the streetscape project being carried out in downtown Riverside this summer.
A Lamp Road Builders obtained its contract in Riverside through the Illinois Department of Transportation, which served as the lead agency for the East Burlington Street streetscape improvements.
IDOT handled competitive bidding and awarding of contracts because the project is being funded primarily with state and federal grant money. The criminal lawsuit against the company did not affect construction, according to Riverside officials.