Construction Consultant Sentenced in Contract Scheme

A Laguna Niguel construction consultant who masterminded a scheme to bilk the federal government out of $175,640 was sentenced Monday to 21 months in prison.

U.S. District Court Judge Edward Rafeedie also ordered John R. Sevier III, 42, to serve three years of supervised release after prison and to repay the money fraudulently billed on federal construction contracts.

Sevier used the misappropriated funds to build a swimming pool, spa and patio deck and to provide landscaping and other improvements and furnishings to his Laguna Niguel home, in addition to taking his family on a Hawaiian vacation, Assistant U.S. Atty. Nathan J. Hochman said.

Sevier pleaded guilty in August to three charges of submitting false claims to the government and three charges of soliciting kickbacks from a Temecula construction company hired to complete three government building projects. In exchange for his guilty plea, prosecutors dropped 18 other charges against him. He had originally faced a maximum prison sentence of 45 years and fines of up to $1.5 million.

Federal prosecutors said the scheme began two years ago when Forcon International Inc. in Irvine hired Sevier, an independent construction consultant, to arrange for a contractor to finish a laboratory and two equipment testing buildings for the Navy and Air Force. The original Nevada contractor went out of business and failed to finish the projects.

Sevier arranged to hire Paragon Pacific Contractors Inc. in Temecula, whose two partners also were sentenced in the scheme. Sevier persuaded the company’s partners, Howard K. James and Craig A. Vaz, to inflate construction bills and pay him the excess, Hochman said.

James was sentenced Monday to four years of probation and fined $5,000. Vaz received an identical sentence last week.

Vaz and James did not receive money from the scheme, said Terri Price, special agent with the U.S. Small Business Administration office in Los Angeles. Sevier would hold up Paragon Pacific’s checks until Vaz and James paid Sevier’s creditors on his behalf, Price said.

The two cooperated with investigators on the case when the construction bonding company got suspicious over the amounts of the bills and demanded records to justify the expenses, Price said. During the investigation, the two agreed to wear hidden transmitters to record conversations with Sevier.