Asphalt firm officials charged with price fixing

By Thanassis Cambanis, Globe Staff
September 13, 2002

Two top officials from Aggregate Industries, one of the state's largest asphalt and cement companies and the biggest supplier for Big Dig contractors, have been arrested and charged with price fixing on public contracts, federal prosecutors announced yesterday.

The complaint, which comes as federal investigators in Massachusetts are increasingly scrutinizng major construction companies, marks the first time in four years that the public corruption unit in the US attorney's office has brought criminal charges against a contractor.

William Cowhig, 65, of Topsfield, a senior vice president, and Luigi Iuliano, 46, of Winchester, a general manager in a sales division, were arrested Tuesday and charged with mail fraud, witness tampering, and conspiracy to collude and fix prices on stone contracts.

''It is incredibly important to protect the government and the public's interest in the bidding process,'' US attorney Michael Sullivan said.

The FBI and the Department of Transportation's Office of the Inspector General is continuing the price-fixing investigation that began in 1998.

According to prosecutors, the executives from Aggregate Industries illegally colluded with another stone supplier in order to artificially submit the winning low bids on six stone projects, including four MBTA contracts in Charlestown between 1998 and 2002.

The criminal complaint does not name any Big Dig contracts.

In a statement, Aggregate Industries said the company was not a target of the probe.

''The conduct of the employees, if proven to be true, will be in violation of company policy and directives,'' Aggregate Industries said. ''Furthermore, the company has not been the beneficiary in any way of the alleged transactions or conduct by the employees.''

Authorities would not name the other company that allegedly engaged in price-fixing with Aggregate Industries, but identified it as a family-owned supplier of crushed stones in Eastern Massachusetts. That company is now cooperating with federal investigators.

The outfit whose executives were charged was originally known as Bardon Trimount, until it was acquired by Aggregate Industries, an international conglomerate based in England, in late 2000.

In 1998, Cowhig approached the competitor and suggested colluding on bids, the FBI said.

That same year, the two companies agreed to coordinate their bids to sell ballast stone to the MBTA; each contract was worth about $30,000.

Over the next four years, the two companies allegedly colluded on bids to the T at least four times.

In April 2002, Iuliano learned that his competitor had been issued a grand jury subpoena, according to the FBI.

''Don't bring any of the paperwork,'' Iuliano allegedly advised the witness. ''Tell them you don't have any.''

Cowhig allegedly told the cooperating witness, ''I got rid of all my books. So there's nothing they can find on me if they decide to subpoena me. And I would die before I mentioned anything. They'd have to pull out my [expletive] nails.''

The other contractor recorded all his conversations with Iuliano and Cowhig, and has turned the recordings over to investigators.

If convicted, Cowhig and Iuliano face a maximum of five years in prison for the mail fraud and conspiracy charges, and 10 years for witness tampering, along with total fines of $750,000.

Raphael Lewis of the Globe Staff contributed to this report.T hanassis Cambanis can be reached at tcambanis@globe.com

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