BLOOMINGTON, Ind. (WISH) – Three men–including a recently-fired City of Bloomington project manager and two contractors–were arrested and charged Wednesday as part of a scheme that bilked more than $800,000 from the city of Bloomington, federal prosecutors said.
Authorities claim the men stole the money from the city by falsifying invoices for construction work that was never completed or was done by other construction companies. Former city project manager Justin Wykoff, 43, of Bedford, was arrested at his home Wednesday morning. He faces 24 counts of embezzlement and one count of conspiracy. Roger D. Hardin, 51, and his son, Zachary, 25, were also arrested on conspiracy charges. All three men were expected to appear in federal court in Indianapolis Wednesday afternoon.
“This is a significant loss to the city of Bloomington and frankly the investigation into this matter is ongoing,” U.S. Attorney Joseph Hogsett said.
Prosecutors claim Wykoff approved false invoices which then led the city to pay out at least $800,000 to the Hardin’s company, Reliable Concrete Construction. U.S. Attorney Joseph Hogsett said the money was then placed into an account for the Hardins, where cash payments would then be given to Wykoff in the form of “kickbacks.”
“It’s basically double billing the city for work that was already done by another contractor and hiding that by having the government insider be the one that authorizes the payment of the invoices–knowing that the work was not done or that it was done by someone else,” said lead prosecutor Steve DeBrota.
Hogsett says some of the city invoices were for projects like a streetscape improvement project along Rogers Street. Hogsett says RCC only did some of the work, or in other cases, none at all, but was paid in full.
Roger D. Hardin told investigators that Wykoff drafted, created and approved all the invoices. Hardin went on to say that the company was formed in 2011 when he was still in prison serving time for a drug charge.
Wykoff, who had been with the city since 1991 was fired, before his arrest, Hogsett said. No one inside Wykoff’s office at the Public Works Department would comment. A woman inside referred a reporter to the mayor’s office for any questions. A message was left for Mayor Mark Kruzan but had not been returned before news time.
Bloomington Police Chief Mike Diekhoff said it was an employee inside the public works office that tipped off police after finding inconsistencies in some invoices weeks ago.
“It came to light after some questionable bids were looked at and that’s what started it,” he said.
Hogsett claimed the scheme went on for years without anyone noticing because of Wykoff’s position inside city government.
“The Hardins would then make cash payments or kickbacks to Mr. Wykoff estimated totally 33 percent or 1/3 of the total amount of invoiced payments. This occurred at least 24 times over the two and a half year period,” Hogsett said.
Wykoff has a non-listed phone number and a number for the Hardin’s was not working.
More charges could be filed, Hogsett said, and that $800,000 could grow as the investigation continues.