Two Suspects Still at Large in California Contractor Bond Fraud Case

August 17, 2004

Authorities are seeking two men suspected of participating in a scam that used phony insurance certificates and fake contractor bonds to win bids on public works projects. Three other suspects have already been arrested following a one-year investigation by the California Department of Insurance (CDI) Investigation Division.

The arrests of the three suspects were made earlier this month by the (CDI) Fraud Investigators and the Oakland Police Department. The Sacramento County District Attorney’s office is pursuing 21 felony counts in the case.

Authorities are still seeking Robert Joe Hanson of Las Vegas and Alifeleti Kaufana Vaituulala of Sacramento. Thomas J. Shirley Jr., of Placerville, and James Chester Taylor Jr., of Quartz Hill, were arrested on August 5, posted bail and were released. Vika Finau Vaka of Oakland posted bail and was released.

The fraudulent contractor bonds and fake certificates of liability and workers’ compensation insurance were allegedly issued in connection with ANJ Construction of Sacramento. Vaituulala, part owner and managing partner of the firm, submitted four contractor bid proposals for public works projects across California. Investigators say the bids were backed by the phony documents, creating significant financial liability for the municipalities.

The case involved public works bids made by ANJ Construction between 2001 and 2003:

City of Sacramento: ANJ Construction won a contract in 2002 with the City of Sacramento, bidding $691,800 to recoat the interior of the Freeport Reservoir water tower. ANJ allegedly submitted a fake Guarantee Bond from Millennium Bonding, a Texas surety company that is not authorized to transact insurance in the state of California. Robert Joe Hanson allegedly issued the bond when he was not licensed to sell insurance in California. ANJ allegedly submitted required insurance documents to the City of Sacramento which showed that it was ostensibly insured by Hartford Insurance, Lincoln General and Villanova. The documents were allegedly signed by Thomas Shirley, who was not licensed to sell insurance in California and was not an authorized agent for the insurance companies. When the City of Sacramento discovered the deception in February 2003 it ordered ANJ to stop all work and terminated the contract. The city had paid ANJ $48,600 as partial payment on the project, which included $20,250 for bonds and insurance.

Marin Municipal Water District: ANJ won a $314,400 contract in 2002 with the Marin Municipal Water District to recoat a water tank. ANJ allegedly submitted false insurance documents which reflected that it was insured with Hartford, Lincoln General and Villanova. The CDI investigation division found that the insurance documents, purportedly signed by Thomas Shirley, were fraudulent and the Municipal Water District terminated the contract.

Metropolitan Water District of Southern California: ANJ bid $265,000 in 2003 to recoat the interior and exterior of the Sepulveda Canyon water tanks for the Metropolitan Water District of Southern California. The bid included a Bidder’s Bond purportedly issued by Thomas Shirley showing ANJ was insured with the Hartford Insurance Company. The Water District rejected the bid after confirming with Hartford that the Bidder’s Bond was fraudulent.

The City of Folsom: ANJ won a contract in 2002, bidding $324,000 to recoat a water tower for the City of Folsom and allegedly included a false Bidder’s Bond issued by Vika Vaka. ANJ also filed bonds issued by James C. Taylor, Jr. who was not licensed to sell insurance in the State of California. The City of Folsom rescinded the contract.
Charges

Vaituulala is still at large. Bail set at $25,000 and he is charged with seven counts of forgery, six counts of passing a forged document, seven counts of procuring or offering false or forged instrument and one count of grand theft.

Vaka’s bail was set at $10,000. He was arrested and charged with two counts of forgery, two counts of passing a forged document and two counts of procuring or offering false or forged instrument.

Shirley’s bail was set at $50,000. He was arrested on August 5 and charged with three counts of forgery, three counts of passing a forged document and three counts of procuring or offering false or forged instrument.

Taylor was arrested on August 5 and bail set at $10,000. He was charged with one count of forgery, one count of passing a forged document and one count of procuring or offering false or forged instrument.

Hanson is still at large and his bail wasl set at $50,000. He is charged with one count of forgery and one count of procuring or offering false or forged instrument.

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