A former executive from Michigan’s asphalt paving sector has admitted guilt in a significant bid-rigging scheme that compromised fair competition in the state’s paving contracts. Timothy Baugher, who previously served as president of Asphalt Specialists LLC (ASI) based in Pontiac, confessed to collaborating with employees from F. Allied Construction Company Inc. (Allied)-Andrew Foster and Kevin Shell, to manipulate bids for asphalt paving services between July 2017 and May 2021.
Baugher’s plea, submitted on Wednesday in the U.S. District Court for the Eastern District of Michigan, represents the 10th conviction in an ongoing investigation spearheaded by the U.S. Department of Justice’s Antitrust Division. This case has revealed extensive collusion among firms in the Michigan asphalt industry, with ASI and Allied being central figures in the conspiracy.
In January 2024, Baugher’s former company, ASI, along with another ex-ASI executive, acknowledged their roles in the bid-rigging activities with Allied. The operation involved pre-determining which company would secure contracts, misleading customers into believing there was genuine competition. This fraudulent practice led to inflated prices, ultimately denying taxpayers fair value for public infrastructure projects.
The inquiry has resulted in serious legal repercussions for the individuals implicated. In August 2023, Allied and two of its top executives admitted guilt regarding their involvement in the conspiracy. Additionally, ASI faced a hefty fine of $6.5 million on August 15, 2024, for its participation in the unlawful activities.
Acting Assistant Attorney General Doha Mekki emphasized the significance of this ongoing effort to ensure fair pricing for American consumers. “Americans deserve to pay a fair, competitive price to fix transportation infrastructure,” Mekki said. “The division and our law enforcement partners will continue to hold accountable executives who cheat consumers by undermining the competitive process.”
Baugher is facing criminal charges for breaching Section 1 of the Sherman Act, which outlaws practices like price-fixing and bid-rigging. As part of his plea agreement, he could be sentenced to up to 10 years in prison and fined $1 million, with the possibility of additional penalties depending on the profits gained from the illegal activities or the losses incurred by victims. The final sentencing will be decided at a later date.
The investigation, led by the Antitrust Division’s Chicago office and backed by the U.S. Department of Transportation’s Office of Inspector General and the U.S. Postal Service Office of Inspector General, seeks to deliver a clear warning to companies that partake in anticompetitive behavior.
“Corporate executives who collude to fix prices and rig bids will be held accountable,” said Special Agent in Charge Anthony Licari of the Department of Transportation’s Office of Inspector General. Kenneth Cleevely of the U.S. Postal Service echoed the sentiment, adding, “Activities related to bid-rigging and collusion do not promote an environment conducive to open competition which harms the consumer.”
With Baugher’s plea, the case continues to unfold as authorities work to dismantle the networks that have allowed these illicit practices to flourish. As sentencing hearings approach, prosecutors are hopeful that the ongoing legal actions will deter similar schemes in the future, ensuring that taxpayers pay fair prices for vital infrastructure services.
As Baugher enters a plea, the case progresses with authorities striving to break down the networks that have enabled these illegal activities to thrive. With sentencing hearings on the horizon, prosecutors remain optimistic that the current legal proceedings will discourage similar schemes down the line, guaranteeing that taxpayers receive fair rates for essential infrastructure services.
“Activities related to bid-rigging and collusion do not promote an environment conducive to open competition which harms the consumer,” said Executive Special Agent in Charge Kenneth Cleevely of the U.S. Postal Service Office of Inspector General. “The guilty plea in this case represents a win for all law enforcement agencies who investigate those who engage in this type of harmful conduct to ensure that justice is served.”
F. Allied Construction Company, Inc., along with Andrew Foster and Kevin Shell, admitted guilt to two charges related to colluding to stifle competition by conspiring to manipulate bids for asphalt paving contracts in Michigan. The first charge outlined a conspiracy that started as early as June 2013 and lasted until at least June 2019. The second charge detailed a different conspiracy that commenced around July 2017 and extended through at least May 2021.
