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Rochester business owner charged with defrauding the Rochester School Modernization Program

STAFF REPORTS

ROCHESTER, N.Y.-- U.S. Attorney James P. Kennedy, Jr. announced today that Orville Dixon, 53, of Rochester, NY, was charged by criminal complaint with wire fraud for scheming to defraud the Rochester School Modernization Program and the Rochester Joint Schools Construction Board. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.

Assistant U.S. Attorney John J. Field, who is handling the case, stated that the Rochester School Modernization Program (the Program) is a public-works project to renovate and improve various school facilities in the City of Rochester. The Program is overseen and directed by the Rochester Joint Schools Construction Board (the Board). The enabling legislation for the Program required that the Board implement a Diversity Plan for the benefit of persons deemed to be traditionally underrepresented in the construction field, specifically, minorities and women.

According to the complaint, the defendant Dixon, a minority male, was president and owner of Journee Construction. Dixon allowed contractors, who did not meet the requirements of the Diversity Plan, to use Journee Construction as a pass-through agency on Program contracts in exchange for a fee. For example:

• On March 19, 2013, the defendant met with Witness A and told Witness A that he created Journee Construction to be used as a pass-through on certain jobs related to the Program. Dixon noted that, a business, identified as Contractor 1, had directed him to place Contractor 1’s employees on Journee’s payroll for this purpose. In subsequent recorded conversations, the defendant told Witness A that the scheme as an easy way to make money for just “pushing paper.”

• In April and May 2013, Contractor 1 submitted a bid for work on the Program at School No. 5. Paperwork was submitted falsely representing that Contractor 1 planned to utilize Journee Construction as a Minority Business Enterprise subcontractor and supplier for approximately $1,300,000 of services. Both Dixon and Contractor 1 signed the paperwork falsely representing that the defendant agreed and intended to perform the described work. The defendant also falsely claimed to be a certified Minority Business Enterprise (MBE), as required by the Diversity Plan.

• In May 2013, a business, identified as Contractor 2, submitted a bid for work on the Program at School No. 28. In connection with that bid, paperwork was submitted falsely representing that Contractor 2 planned to utilize Journee Construction as a Small Business Enterprise (SBE) subcontractor for $160,000 in supplies. Both the defendant and Contractor 2 signed the paperwork even though Dixon did not have the ability to supply parts for Contractor 2’s requirements.

Dixon did not perform any of the work for Contractor 1 or Contractor 2, nor did he perform any economically useful function as required by the Program. Instead, the defendant simply lent his name to the transactions and illegally served as a “pass through” entity. 

The defendant made an initial appearance this morning before U.S. Magistrate Judge Jonathan W. Feldman and was released.

The complaint is the result of an investigation by the Federal Bureau of Investigation; under the direction of Special Agent-in-Charge Gary Loeffert.

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.