Aaron Construction Group, Inc.
Outcome
President Javier Estepa sentenced to 51 months in federal prison and VP Diego Estepa Vasquez sentenced to 41 months after defrauding Miami-Dade County's low-income housing program of $3.9 million by paying workers below Davis-Bacon prevailing wage rates.
Details
Aaron Construction Group, Inc. — Davis-Bacon / Prevailing Wage Fraud (2017–2019)
Outcome: President Javier Estepa was sentenced to 51 months in federal prison and Vice President Diego Alejandro Estepa Vasquez was sentenced to 41 months after defrauding the Miami-Dade County Public Housing and Community Development program of $3.9 million by falsely certifying workers would receive Davis-Bacon prevailing wages while paying them far below those rates.
Aaron Construction Group, Inc. was a residential contractor based in Davie, Florida that bid on renovation and repair projects for low-income housing administered by Miami-Dade County's Public Housing and Community Development (PHCD) department. The housing projects received federal funding, making them subject to the Davis-Bacon Act's prevailing wage requirements.
Javier Estepa (president) and Diego Alejandro Estepa Vasquez (vice president) submitted bids to PHCD that falsely represented no subcontractors would be utilized and that each worker would be paid the Davis-Bacon prevailing wage rates for each hour worked, including overtime. In reality, immediately after being awarded the contracts, Aaron Construction entered into agreements with subcontractors at fixed low amounts, regardless of hours worked. Workers were not paid prevailing wages, were not paid overtime, and the company submitted false certified payroll records to federal authorities.
As a result of the fraudulent submissions, PHCD transferred over $3.9 million to bank accounts controlled by Javier Estepa and Diego Estepa Vasquez. A Miami federal jury convicted both on charges of conspiracy to commit wire fraud, wire fraud, and false statements to a federal agency following a six-day trial before U.S. District Judge Ursula Ungaro. On May 24, 2019, Judge Ungaro sentenced Javier Estepa to 51 months in federal prison followed by three years of supervised release, and Diego Estepa Vasquez to 41 months in federal prison.
Primary Source: South Florida Construction Company Executives Sentenced Friday for Defrauding a Low Income Housing Development Program
How Crucible Prevents This
Certified payroll record monitoring against bid-stated wage rates would have caught the discrepancy within weeks of contract start. Subcontractor disclosure verification — comparing bid representations against actual subcontractor agreements — is a direct Crucible compliance control. An automated Davis-Bacon compliance flag triggered at the invoice stage would have surfaced the below-rate payments before $3.9M was transferred.
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