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PRESS RELEASE: David Pfeiffer and Thomas Colton, Indicted For Conspiring To Defraud Government Program That Assists Minority Businesses

Department of Justice
U.S. Attorney’s Office
Western District of New York
FOR IMMEDIATE RELEASE
Tuesday, March 8, 2016

Two Men Indicted For Conspiring To Defraud Government Program That Assists Minority Businesses

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051

BUFFALO, N.Y. – U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned an indictment charging David Pfeiffer, 64, of Killbuck, NY, and Thomas Colton, 53, of Salamanca, NY, with conspiracy to commit mail fraud and mail fraud. Pfeiffer was also charged with making a false statement to a financial institution. The charges carry a maximum sentence of 30 years in prison and a $1,000,000 fine. Assistant U.S. Attorney Russell T. Ippolito, Jr., who is handling the prosecution, stated that according to the indictment, Pfeiffer and Colton conspired to defraud government agencies and the Disadvantaged Business Enterprise (DBE) Program. A business can be designated a DBE if at least 51% of the business is owned and controlled by socially and economically disadvantaged individuals. Since 1980, the U.S. the Department of Transportation has utilized the DBE Program in an effort to increase the number of minority and economically disadvantaged individuals who participate in construction projects that receive federal funding.

As set forth in the indictment, between May 2009 and 2013, Pfeiffer and Colton are accused of defrauding among others:
• the U.S. Department of Transportation;
• the New York State Department of Transportation;
• the City of Niagara Falls, NY;
• the Buffalo Urban Development Corporation (BUDC); and
• the Niagara Frontier Transportation Authority (NFTA).

Pfeiffer and Colton used Colton’s business, Sue-Perior Concrete and Paving, Inc., as a subcontractor on federal government contracts. Sue-Perior was used to allow Pfeiffer’s construction company Man O’ Trees to obtain government contracts that it would have otherwise been unable to obtain. Sue-Perior was qualified as a DBE by the NFTA based upon a fraudulent application submitted by Pfeiffer and Colton. As a result of the alleged fraud, Pfeiffer and Colton illegally obtained government construction contracts involving at least three projects:

• the New York State Route 104 Project;
• the Union Ship Canal Project; and
• the Gallagher Beach Project.

In total, the value of the three projects was approximately $15,500,000. General contractors are only permitted to count funds paid to DBE’s that performed a “commercially useful function.” The indictment alleges that Sue-Perior did not serve a commercially useful function in relation to these construction projects. In addition, the indictment alleges that Pfeiffer also submitted false personal financial statements to Five Star bank to obtain credit extensions for his businesses. The defendants were arraigned this afternoon before U.S. Magistrate Judge Michael J. Roemer and released on bond.

The indictment is the culmination of an investigation conducted by the Department of Transportation, Office of Inspector General, under the direction of Special Agent in Charge Douglas Shoemaker, the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Jonathan Mellone, New York Regional Office, and the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen. 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.

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Most of the information you will see comes from some Federal/state Government documents or Federal/State Governm Agency. -----------------------------------------------The fellow that can only see a week ahead is always the popular fellow, for he is looking with the crowd. But the one that can see years ahead, he has a telescope but he can't make anybody believe that he has it. ~~~~Will Rogers __The woman who follows the crowd will usually go no further than the crowd. The woman who walks alone is likely to find herself in places no one has ever been before.~ Albert Einstein ~"I never work better than when I am inspired by anger; for when I am angry, I can write, pray, and preach well, for then my whole temperament is quickened, my understandingsharpen​ed, and all mundane vexations and temptations depart.” ~Dr. Martin Luther King Jr. _________________________________________________________________________________________ ~"The bosom of America is open to receive not only the Opulent and respectable Stranger, but the oppressed and persecuted of all Nations and Religions; whom we shall welcome to a participation of all our rights and privileges, if by decency and propriety of conduct they appear to merit the enjoyment".~___________________________________ George Washington, Address to the Members of the Volunteer Association of Ireland, December 2, 1783 Fredericacade@gmail.com

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