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Contractor defrauded Navy in desperate attempt to save company, attorney says

The U.S. Attorney’s Office sentenced the president of a construction company to 21 months in prison Thursday for allegedly cheating the Navy out of more than $1.2 million during a warehouse renovation project near Mechanicsburg.

The sentence is the second one Andrew Persaud, 44, will serve for crimes he committed as owner of Persaud Companies, Inc., according to documents filed in the U.S. Attorney’s Office for the Middle District of Pennsylvania.

Persaud, who owned the Virginia- and Maryland-based company from 1996 to 2013, entered into a $4.4 million government contract in 2011 to renovate several warehouses at the Naval Support Activity facility in Hampden Township, according to the attorney’s office.

The Navy paid Persaud more than $1.2 million between June and August 2012 after Persaud submitted signed certifications verifying he had paid all 17 of his subcontractors on the project. The government, however, discovered in September 2012 that Persaud never paid the subcontractors, and most of them had walked off the job.

Persaud must report to the Bureau of Prisons on Nov. 21, in addition to paying $1,206,470 in restitutions, according to the release.

Persaud’s attorney, however, had argued for a lighter sentence because Persaud was only recently released from a prison term he served for similar charges.

Between July and November 2012, Persaud submitted false information to a Virginia bank when he applied for an increase in the company’s line of credit, according to court documents. He pleaded guilty and served a 24-month prison sentence, which ended June 1, 2015.

Persaud’s legal counsel, Joshua Lock of Harrisburg-based Goldberg Katzman, P.C., argued in an Oct. 12 memorandum to the court that Persaud’s crimes in Pennsylvania and Virginia could have been grouped into a single sentence.

“Although the charged misconduct in the (Virginia and Pennsylvania) cases involved different crimes, different victims and different evidence, all of the offenses were committed by the same person, at about the same time and for the same reason – Mr. Persaud’s desire to rescue his struggling company,” the memorandum states.

The document characterizes Persaud Companies Inc. as a business that, while successful at its start, was “reeling from the effects of (Persaud’s) reckless personal, business and financial decisions” by 2010.

By 2012, Lock writes, Persaud was resorting to crime in a desperate effort to save the company.

Because of the similarities between the charges, as well as the potential hardship a second prison term could cause for Persaud’s family, Lock argued for a sentence of no more than nine months of in-home confinement or a similar term served in Adams County Prison, where he could be eligible for the county’s work-release program.

“Mr. Persaud now faces the very real prospect of a separate, additional, significant jail sentence for activities committed during what was, essentially, a single ‘crime spree,'” Lock wrote before the sentencing.

Lock could not be reached for comment Friday morning.

A phone number listed online for Persaud Companies is no longer in service. A second number listed on the company’s website rang Friday morning but was not answered.

Jennifer Wentz
Jennifer Wentz covers Lancaster County, York County, financial services, taxation and legal services. Have a tip or question for her? Email her at [email protected].

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