Three men who pleaded guilty to fraud and kickbacks related to a government home loan program were sentenced in federal court last week.
The U. S. Attorney's Office for the Middle District of Pennsylvania announced Dec. 15 that Timothy Allen Truax, Chandler Wells and Dean Bergstresser were sentenced by District Judge William C. Caldwell.
Truax, 39, of Steelton, Pa., was sentenced to a 30-month prison term, followed by one year supervised release and ordered to pay $135,054.43 in restitution to the Dauphin County Office of Community and Economic Development (OCED).
Previously, Bergstresser, 49, of Harrisburg, Pa., was sentenced to four months in prison, one year of supervised release and restitution in the amount of $6,300.
Wells, 40, of Wellsville, Pa., was sentenced to three months in prison, two years of supervised release and restitution in the amount of $39,209.
Truax and three area contractors, Bergstresser, Wells and Timothy Ladika were indicted in February by a federal grand jury in Harrisburg on charges of fraud and kickbacks in the awarding of contracts for a federally funded program.
Truax was charged with theft of approximately $85,500 in the form of kickbacks he received from contractors who were awarded contracts by Truax.
Bergstresser, Wells and Ladika were all charged in separate indictments for receiving federally funded contracts through a combination of rigged inside information bidding, improper no-bid awarding of contracts, or receiving federal monies where no work was performed.
All three were also charged with giving kickbacks in connection with these transactions. Wells received $114,909 through this scheme; Bergstresser, $227,673 and Ladika $14,745.43.
Dauphin County funded the program from grants by the U.S. Department of Housing and Urban Development (HUD) to low income families to rehabilitate their homes,
According to the announcement, Truax was employed by OCED as the community development block grant monitor and home rehabilitation specialist. He was responsible for the review of applications for grants and solicitation of bids from contractors to perform the work.
But the U.S. Attorney’s office said that Truax gave contractors inside bid information so that they would be a low-bidder or he awarded the contract to one of the contractors without soliciting bids from others. He also falsified applications for grants, approved those applications and then gave the grant money to contractors when no work was performed.
Ladika awaits sentencing.