A former West Virginia Division of Highways engineer and a Putnam County contractor won’t go to prison for their role in a kickback scheme that illegally funneled $1.5 million projects to a South Carolina firm.
On Monday, a federal judge sentenced traffic engineer James Travis Miller and businessman Mark Whitt to three years of probation. Neither was fined. Whitt was ordered to pay $250,000 in restitution to the state.
Whitt, former president of Putnam electric contractor Bayliss & Ramey, and Miller join a growing list of individuals and companies convicted in the scheme to defraud the DOH.
Two weeks ago, former DOH traffic engineer Bruce E. Kenney III was sentenced to 21 months in prison. Kenney, who allegedly orchestrated the scheme, funneled work to Dennis Corp., a South Carolina firm, in exchange for $200,000 in bribes.
Miller, who worked for the DOH before landing a job with Dennis Corp., delivered covert payments to Kenney to ensure the DOH did special favors for Dennis Corp., according to federal prosecutors. Miller was charged with money laundering.
Whitt, whose company had a statewide contract to repair traffic signals, used that contract to funnel highway projects to Dennis Corp., according to the U.S. Attorney’s Office in Wheeling. Whitt, who was charged with wire fraud, benefited from the scheme by helping to conceal the flow of illegal funds from the DOH to Dennis Corp., prosecutors said.
Whitt’s company, Bayliss & Ramey, inflated invoices by 20 percent to ensure it was compensated in the scheme, according to prosecutors.
In October, Bayliss & Ramey signed a “deferred prosecution agreement” with the U.S. Attorney’s Office in which the company agreed to cooperate with federal investigators and adopt corporate reforms to prevent fraud in the future. In exchange, federal prosecutors agreed to drop all charges after 18 months.
Since July 2014, the state has paid Bayliss & Ramey $12.5 million, according to the state Auditor’s website.
The DOH is scheduled to open bids for a new signal repair contract Tuesday. Bayliss & Ramey did not submit a bid.
Earlier this month, the state Purchasing Division started proceedings to bar Whitt and his former company from doing business with state and local governments.
The “debarment” proceedings started a week after the Gazette-Mail reported that the DOH had awarded three contracts — valued at more than $600,000 — to Bayliss & Ramey, even though the company and Whitt admitted guilt last year in federal court.
Purchasing Division officials initially resisted sanctioning Bayliss & Ramey, saying they couldn’t take action against the electrical contractor until after Whitt’s sentencing in federal court. State officials insisted they could do nothing without a formal conviction.
A Legislative Auditor’s report released Sunday concluded that state officials had sufficient grounds to bar the Putnam firm from bidding on government contracts following Whitt’s guilty plea.
Two more men await sentencing in connection with the kickback scheme: Former Marshall University professor Andrew P. Nichols and Dennis Corp. executive Daniel R. Dennis.
Nichols, who resigned under pressure last month, is scheduled to be sentenced Aug. 28. Dennis’ sentencing is set for Sept. 20.
The FBI, state Legislature’s Commission on Special Investigations, IRS and West Virginia State Police investigated the DOH kickback scheme. Assistant U.S. Attorney Jarod Douglas prosecuted the case.
U.S. District Judge Frederick P. Stamp Jr. sentenced Whitt and Miller Monday afternoon in Wheeling.
Reach Eric Eyre at email@example.com, 304-348-4869 or follow @ericeyre on Twitter.