DEPARTMENT OF JUSTICE
Troy A. Eid
United States Attorney, District of Colorado
FOR IMMEDIATE RELEASE
DENVER (LAWFUEL) – The owner of Disaster Restoration, Inc., Michael Arthur Griggs, along with nine of his current and former employees, were indicted late yesterday by a federal grand jury in Denver on charges of conspiracy, mail fraud and interference with commerce by threats or violence, U.S. Attorney Troy A. Eid and U.S. Postal Inspector in Charge Shawn S. Tiller announced today. All ten defendants will receive summons to appear in U.S. District Court in Denver at a day and time yet to be determined.
Disaster Restoration, Inc., (DRI), is a Colorado corporation located in Denver, Colorado. DRI engaged in the repair, restoration, and reconstruction of commercial and residential real estate properties that have been damaged by fire, water, and other disasters. DRI acted as a general contractor, which regularly hired and paid subcontractors to restore damaged properties and then submitted the cost of the repairs made by these subcontractors to insurance companies for payment.
The indictment alleges that beginning in or about the Fall of 2003, and continuing until approximately early 2007, the defendants knowingly agreed and conspired with each other to commit mail fraud. Further, every Tuesday, DRI would hold an internal meeting where they often discussed how to instruct many of the subcontractors working for DRI to inflate their original bid proposals by 20% to 30%. DRI employees regularly instructed subcontractors to provide DRI with two different documents reflecting their bids, one inflated and one non-inflated, for the same work they would perform for DRI. The inflated price was to be submitted to the insurance company for payment while DRI would pay the subcontractor based on the lower original price. DRI pocketed the difference between the inflated price paid by the insurance company and the lower price paid out to the subcontractor thereby increasing, often substantially, DRI’s profit margin on DRI’s restoration projects.
The insurance companies relied on these false and inflated subcontractor prices when they made payments for the restoration projects performed and supervised by DRI. Most of these insurance payments were sent through the United States Postal System. DRI would, in turn, issue checks payable to the subcontractors and mail them as well. In counts 58 and 59, defendant Charles “Chip” Sharp is charged with violations of the Hobbs Act (commercial extortion) based on his demand that subcontractors, who had already completed their work projects for DRI, further lowered their invoices by thousands of dollars if they wanted to be paid by DRI in a timely manner, or at all.
Charged in the 60 count indictment are:
* Michael Arthur Griggs, owner and operator of the company, of Lafayette, Colorado, charged in counts 1 through 57 and 60.
* Charles “Chip” Homer Sharp, chief operating officer/general manager, of Broomfield, Colorado, charged in counts 1 through 60.
* Justin Shane Blackburn, lead estimator (for some of the time), charged in counts 1 through 11, 14, 15, 24, 25, 27 to 37, 43, 45, 51, 53, and 60.
* Mark R. Troudt, lead estimator (for some of the time), of Broomfield, Colorado, charged in counts 1 through 4, 7, 8, 12, 13, 16, 17, 20, 26, 42, 46 through 50, 52, 57, and 60.
* Jason Alan Cain, estimator, of Colorado Springs, Colorado, charged in counts 1, 5, 6, 18, 19, 21 through 23, 38 through 41, 48, 55, 56, and 60.
* Brett David Harding, estimator, project manager, of Thornton, Colorado, charged in counts 1 through 3, 12, 13, 44, 46, 47, 49, 50, 54, and 60.
* Peter T. Jennings, project manager, of Brighton, Colorado, charged in counts 1, 44 through 47, 49, 50, 54, 55, and 60.
* Matthew Kaskel, project manager, of Denver, Colorado, charged in counts 1, 20, 26, 29, 57, and 60.
* Garland Scott Risdon, project manager, of Centennial, Colorado, charged in counts 1, 3, 4, 9 through 11, 15, 20, 21, 23, 42, and 60.
* Daniel John Travers, supervisor of the emergency services, of Arvada, Colorado, charged in counts 1, 2, 14, 18, 19, 22, 36, 41, 48, 52, 56, and 60.
If convicted of count 1, conspiracy, the defendants face up to 5 years in federal prison, and up to a $250,000 fine. If convicted of counts 2 through 57, mail fraud, the defendants face not more than 20 years in federal prison, and up to a $250,000 fine. If convicted of counts 58 and 59, interference with commerce by threats or violence, defendant Sharp faces not more than 20 years in federal prison, and up to a $250,000 fine.
The indictment includes an asset forfeiture count, where in the government is asking the court to seize the building DRI was operating in at 4275 Forest Street, as well as Michael Griggs bank accounts and home in Lafayette, Colorado.
“Defrauding insurance companies impact consumers,” said U.S. Attorney Troy Eid. “It is important to prosecute such schemes in order to protect consumers.”
“Insurance fraud is not a victimless crime, it hurts everyone,” said U.S. Postal Inspector in Charge Shawn Tiller. “Losses from this type of fraud are passed along to the public in the form of higher insurance premiums. These charges were the result of the hard work of Postal Inspectors, working with the National Insurance Crime Bureau, investigating individuals who use other people’s misfortune to commit crimes for profit.”
This case was investigated by the U.S. Postal Inspection Service and the National Insurance Crime Bureau. The case is being prosecuted by Assistant U.S. Attorneys Pegeen Rhyne and Bob Mydans.
The charges are only allegations and the defendants are presumed innocent unless and until proven guilty.