An informal, multi-state network of companies and brokers appears to be involved in fraudulently produced Chubb surety bonds discovered earlier this year and other controversial surety practices, according to interviews with small contractors that have lost premiums paid for the bonds. Exactly who is responsible for the fraud remains unclear.
Obtained in the last 18 months for public-works projects in three states and American Samoa, the bonds cost the contractors about $230,000 in total premiums.