Two from Burr Ridge Under Federal Indictment

A Burr Ridge resident and former resident are facing federal charges of fraudulent billing and kickbacks.

John Paderta, 52, of Fontana, WI, and formerly of Burr Ridge, and Scott Solano, 40, along with seven other area businessmen, were indicted for allegedly engaging in a fraudulent billing and kickback scheme in connection with the development of commercial property in Bolingbrook.

Paderta, Fontana and the others worked with Chicago-based Krahl Construction and a San Francisco-based real estate trust. The nine men allegedly caused losses of $9 million and $400,000 respectively to the two client companies, while the former employees of those firms allegedly received kickbacks valued at $645,000 and $119,500, respectively. Paderta was president of Krahl, which closed its Chicago office in January 2010 after FBI agents executed a federal search warrant.

All nine defendants were charged together in a 16-count indictment returned Nov. 10 by a federal grand jury, Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, announced earlier this week.

The indictment alleges that between 2005 and 2009, certain defendants fraudulently inflated the cost of renovation projects performed by Krahl and caused the creation of false documents to support the inflated costs, resulting in overbilling  by at least $15 million to Company A, which suffered actual losses of at least $9 million, and losses of approximately $400,000 to Company B. At the same time, the two clients’ employees secretly used their positions to solicit and accept bribe/kickback payments and home improvements in exchange for favorable action to help Krahl obtain contracts with those companies, the indictment charges. Company A is identified as a San Francisco-based real estate investment trust that hired Krahl to renovate portions of an eight-story building at 350 E. Cermak, Chicago. Company B is identified as a property management firm located on Michigan Avenue in Chicago, that hired Krahl to develop commercial property in Bolingbrook known as the Tallgrass project.

According to the indictment, Paderta allegedly set up sham companies that could be used to fraudulently obtain payment from customers and created documents containing false information to support the inflated prices being charged by Krahl. Those documents included fraudulent invoices, change orders, lien waivers, applications and certifications for payment, and numerous documents from the sham companies.

The indictment alleges that Solano solicited and accepted kickbacks from Krahl, including payments totaling approximately $520,000 and renovations on Solano’s home totaling approximately $125,000. The renovations included work on the basement, general repairs, new windows, and installation of a generator and new televisions. In exchange for the kickbacks, Solano promised to, and did, take favorable action on behalf of Krahl as requested and as opportunities arose, including helping Krahl obtain contracts from Company A, while Solano was employed at Company A and elsewhere.

Paderta, 52, of Fontana, WI, and formerly of Burr Ridge, the president of Krahl who owned approximately 85 percent of the company, was charged with one count of mail fraud.

Solano, property manager for the Cermak building, first as an employee of Company C, which managed the building for Company A, and then, beginning in April 2009, as an employee of Company A, who was charged with one count of mail fraud.

Other current or former area residents indicted are:

• Thaddeus Stepniewski, 50, of Lisle and formerly of Lombard, Krahl’s chief financial officer, who was charged with 15 counts of mail and wire fraud;
• Scott Mousel, 48, of New Orleans and formerly of Lisle, a Krahl project manager for two portions of the Cermak project, who was charged with five counts of mail fraud;
• Erin Scott, 36, of Clarendon Hills, also a Krahl project manager assistant on the Cermak project, who was charged with four counts of mail fraud; and

Each defendant will be arraigned at a later date in U.S. District Court.

Each count of mail and wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, or a fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The indictment also seeks forfeiture from Paderta, Stepniewski and another employee of at least $9 million. Separately, it seeks forfeiture of approximately $645,000 from Solano, and approximately $119,500 from another employee, representing the value of the bribes/kickbacks they each allegedly received.

More details can be found .