Is a contractor that has been caught submitting a fraudulent surety bond and being cheated out of the premium capable of obtaining surety credit from licensed brokers and Treasury-listed sureties? 
In at least one case, the answer is yes.

A small general contractor in Colorado, Terravision Contracting Group, replaced the fraudulent bond it purchased for a small renovation project with one from a Treasury-listed surety, completed the project on time and under budget and moved on to bid for and win another project from the same owner. Another 21 contractors are known to have purchased similar fake bonds made to appear as if they were from a unit of The Chubb Group.

Most recently, Terravision used surety bonds obtained via a licensed broker from Travelers, according to records provided by Montrose County, Colo.

Terravision bills itself as a versatile general contractor and construction manager operating in Colorado, Utah, Nevada and Wyoming. Based in Montrose County, the company’s website lists its co-owners as Andrea and Matt Brezonick. Matt Brezonick serves as construction advisor, according to the website, and his biography says he has over 16 years of construction experience.

About 18 months ago Terravision submitted the low bid of $523,572 for a renovation of the Montrose County Courthouse. 

That number was more than $200,000 below the only other bidder and the county awarded Terravision the contract on September 4, 2012, according to the meeting minutes of the Montrose County Board of Commissioners.



With its low bid, Terravision provided the county a $26,178.60 bid bond from individual surety Linda Garrahan. Her company is listed as First Fidelity Lending Corp., which secured the bond with an irrevocable letter of credit—a security used by other individual sureties whose true value is difficult to determine.

Similar to other individual sureties, First Fidelity’s website extols the benefits of individual surety over corporate surety. It states that First Fidelity is “a private investment company” that has “over two billion dollars in assets.”

In addition to its bid bond, Terravision provided Montrose County a payment and performance bond for $306,254.18 that appeared to be from Pacific Indemnity Company, a unit of The Chubb Group. As it turns out, Terravision’s bond was one about 22 fraudulent Pacific Indemnity/Chubb Bonds provided to small contractors in 2012 and 2013. The contractors lost premiums ranging from a few thousand dollars to over $400,000.

Errors on Bonds

Terravision's payment and performance bonds had several notable errors on them, including a lack of bond numbers anywhere on the documents, a power of attorney form labeled “Power of of attorney,” a misspelling of a Pacific Indemnity employee’s name, and mismatched dates on the bond form and power of attorney document. The phone number at the bottom of the power of attorney document, listed for verification purposes, is currently disconnected.

Last August, Pacific Indemnity and Federal Insurance filed a lawsuit against Steven Stokeling and Eric Campbell, the defendants whom Terravision allegedly paid $15,312.70 for its bonds. Neither Stokeling nor Campbell have responded to the sureties’ lawsuit in federal court for the Northern District of Florida in Pennsacola.

The sureties are seeking an injunction to prohibit the defendants from selling fraudulent bonds and the payment of attorney fees.

 TerraVision’s Matt Brezonick did not respond to phone calls and emails from ENR seeking comment on the individual surety that provided the bid bond or the broker that provided fraudulent Pacific Indemnity bond.

There is no evidence that Terravision's owners were aware that a bond they had paid for was fraudulent.

According to documents from Montrose County, Brezonick and Terravision replaced the bid and performance bonds with new ones from State Automobile Mutual Insurance Company, dated December 21, 2012. 

For the second phase of the project, the contractor’s bonds for $217,317.88 came from American Southern Insurance Company.

Both are Treasury-listed corporate sureties.