STANDISH, MI — A Standish-based surveying company is the focus of a federal investigation into possible tax fraud.
Revealed in federal court documents that were briefly unsealed, the FBI has been engaged in a lengthy probe into Surveying Solutions Inc., investigating allegations of wire fraud, conspiracy, and money laundering, according to The Detroit News. At least five company executives are targeted in the investigation.
It is alleged these executives could have defrauded taxpayers of more than $7.3 million by overbilling, submitting fake expenses, and giving six-figure jobs to their spouses, The Detroit News reports.
The investigation came to light when hundreds of pages of FBI search warrant affidavits and lists of items seized during July 2019 raids were unsealed Thursday, March 4. The documents have since been resealed and are no longer available to the public to peruse.
Surveying Solutions is one of Michigan’s preeminent surveying firms and has worked on more than 150 Michigan Department of Transportation projects worth $29.3 million.
“SSI is one of the most unique and sought-after surveying and construction companies in the United States,” company attorney Wade G. Fink said in a statement to MLive. “The company makes its home in Michigan where it employs more than 120 Michigan families. SSI is currently working on critical infrastructure projects in Michigan at rates well below that of an average competitor’s cost. In fact, SSI has always provided services to the Michigan taxpayer at rates substantially lower than competitors. SSI provides services no one else can and the MDOT puts Michigan drivers’ safety above all else. Michigan residents can be proud of the MDOT by doing everything in its power not to sacrifice the safety of our roads and highways. As far as these allegations are concerned, if and when they are unsealed, and should they ever be made in a courtroom, that is where we will defend against them.”
Jeff Cranson, MDOT’s director of communications, told MLive the investigation “is the result of reviews by MDOT’s Office of Commission Audit and later by the Federal Highway Administration’s Office of Inspector General. MDOT continues to cooperate with the federal authorities on the investigation.”
No criminal charges have been filed in the case. As such, MLive is not naming the five company executives who were named in the FBI documents.
The firm, with offices in St. Johns, Novi, and Saginaw, was paid $14.3 million as a prime contractor from 2016-18. A state auditor estimated that from 2016-18, MDOT overpaid $850,360 to Surveying Solutions due to “fraudulent representations regarding employment of spouses,” according to the FBI, The Detroit News stated.
The City of Saginaw has worked with Surveying Solutions on projects for years, said Public Works Director Phil Karwat.
“We have a contract with them for a five-year agreement,” Karwat said. “They do great quality work. They’re a phenomenal company. Their invoices from what we review are always accurate. It’s been in the best interest of the city to utilize them for their services.”
Between 2018 and 2020, the city paid Surveying Solutions $219,200 for various projects, Karwat said.
Karwat added he was surprised to hear about the investigation.
“Until this shakes out, I’m pretty blown away, to be honest,” he said.
Assistant U.S. Attorney Anca I. Pop wrote in a court filing Thursday that the search warrant records needed to be “sealed to avoid compromising an ongoing investigation.”
The Detroit News described the documents as revealing a sprawling investigation and an elaborate conspiracy involving allegations of wasted tax dollars, ghost employees, and $70,000 bonuses for wives who never worked on state construction projects because they had full-time jobs, including work at a spa and a Saginaw high school.
“Specifically, (Surveying Solutions) executives organized shell companies to create fictitious expenses,” the FBI agent wrote. “The fictitious expenses were ultimately paid by MDOT and also caused profit payments from MDOT to (Surveying Solutions) to be inflated.”
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