Two top officials of a Texas construction company—Honest, Experienced, Reliable Contracting Solutions LLC—have been sentenced to federal prison terms for defrauding the State Dept. through a plan to steer more than $1 million in contracts to the company, the Dept. of Justice says.
The latest development in the case came on July 6, when Judge Liam O'Grady, in U.S. District Court in Alexandria, Va., sentenced Gary A. Duff, HERC Solutions' owner, chief executive officer and former president, to 18 months in prison.
On Jan. 19, O'Grady sentenced Steven J. Graves, the company's president, to 15 months in prison.
Both men earlier had pleaded guilty to federal charges—Duff on Feb. 12 to one count of wire fraud and conspiracy to defraud the United States, and Graves on Sept. 20 to conspiracy and wire fraud and violating a conflict-of-interest law.
The government said the fraud took place between 2011 and 2016 and involved about $1.4 million. The State Dept. contracts included one for construction and another for generators at the U.S. embassy in Kabul, Afghanistan.
(Heavy-equipment rental company Herc Rentals Inc. and its parent, Herc Holdings Inc., both based in Bonita Springs, Fla., have no connection with HERC Solutions, Herc Rentals spokesman Paul Dickard said via email.)
From November 2011 to February 2013, Graves was a contract specialist and senior contracts administrator with the State Dept.'s office of acquisition management. But during Graves' time at the department he also was "a silent or de facto partner in HERC," who helped Duff get start-up capital and develop "business and joint-venture opportunities," according to a court filing.
Court documents say Graves concealed his HERC Solutions ties and conflict of interest from officials at the State Dept. and others.
Graves also made loans or contributed capital to Duff, from whom he received payments. In addition, Graves "provided joint venture partners with confidential bid and procurement information," according to a government filing.
One court document cites State Dept. contracts awarded to HERC Solutions in 2012 for work at the U.S. embassy in Kabul. It says that Graves, then at the State Dept., recommended to a contracting officer there that HERC be awarded a contract to design and construct a building where embassy vehicles' radio systems were repaired or installed.
According to DOJ, in 2012 Graves also recommended that a State Dept. official award HERC a contract to purchase and install power generators at the embassy in Kabul.
HERC Solutions was formed in March 2011 and, according to a company LinkedIn page, is based in Lockhart, Texas. It's unclear whether the company is still in operation.
A court filing states that the company "claimed to specialize in international construction projects for the United States government in developing countries and military zones."
Several months after HERC Solutions was established, it received certification under the U.S. Small Business Administration's HUBZone program. The program sets aside contracts to small firms in urban or rural areas that are "historically underutilized."
Graves' attorney, Sara Kropf, had no comment. ENR was unable to locate Duff's attorney.