INSPECTOR GENERAL
DEPARTMENT OF DEFENSE
DEFENSE CRIMINAL INVESTIGATIVE SERVICE
KANSAS CITY POST OF DUTY
500 STATE AVE, STE 565
KANSAS CITY, KS 66101-2453
(Investigations)

200900551P-11-DEC-2008

(b)(7)(E)

E8

July 10, 2014

CADDELL CONSTRUCTION COMPANY (et al.)

SPECIAL INTEREST CASE
CASE SUMMARY: This case was initiated following a meeting with SA (b)(6), (b)(7)(C)
(b)(6), (b)(7)(C)
SA (b)(6), (b)(7)(C)
U.S. General Services Administration (GSA) and (b)(6), (b)(7)(C) U.S.
Department of Labor (DOL) at the GSA office in Kansas City, Missouri. The meeting was held
to discuss possible contract fraud committed by primary contractor Caddell Construction
Company, Inc. (Caddell Construction) and sub-contractor Mountain Chief Management Services
(Mountain Chief) for work on the Edward Zorinsky Federal Building renovation project in
Omaha, Nebraska. The Zorinsky renovation project was issued under GSA contract number
GS06P02GZC0546 on May 27, 2004 and concluded in June 2007 for a total value of
$43,000,000. The U.S. Army Corps of Engineers (USACE) provided on-site project
management during the renovation project and maintains office space in the Zorinsky Federal
Building.
(b)(6), (b)(7)(C)

SA
relayed information regarding an ongoing GSA/DOL investigation into Tufty
Drywall, Inc., a sub-contractor working for Caddell Construction on the Zorinsky project. The
total contracted amount between Caddell Construction and Tufty Drywall was approximately
(b)(4)
During the investigation, Tufty Drywall employees stated that Caddell Construction
management instructed Tufty Drywall employees to file their paperwork on the project as
Mountain Chief. Tufty Drywall employees also stated that Caddell Construction management
told Tufty Drywall that they were to call themselves Mountain Chief. Subsequent interviews of
Tufty Drywall employees indicated that while Mountain Chief appeared to be connected to the
Zorinsky project, Mountain Chief did not perform any work during the renovation period.
Caddell Construction, a top 100 contractor, utilizes Department of Defense Special
Programs; specifically the Mentor-Protege Program and the Indian Incentive Program through
Mountain Chief. Mountain Chief is a self-certified Small Disadvantaged Business and Native
American-owned business. The Mentor-Protege Program paid Caddell Construction
approximately $467,000.00 through a 2003-2004 agreement to mentor Mountain Chief. Caddell
Construction also received approximately $734,874.00 from the Indian Incentive Program citing
CLASSIFICATION:

FOR OFFICIAL USE ONLY
LAW ENFORCEMENT SENSITIVE

WARNING
This document is the property of the Department of Defense Inspector General and is on loan to your
agency. Contents may not be disclosed to any party under Investigation nor may this document be
distributed outside the receiving agency without the specific prior authorization of the Deputy Inspector
General for Investigations.

 200900551P-11-DEC-2008

(b)(7)(E)-E8

2

Mountain Chief as a sub-contractor on various Army Corps of Engineers projects from 20032005.
February 26, 2009, Update: A review of records from the Department of Defense
(DoD) Office of Small Business Programs, Small Business Administration (SBA), GSA and
DOL was conducted for additional leads. A former Mountain Chief employee was interviewed
and provided information related to the sub-contract agreements between Mountain Chief and
Caddell Construction. Additional interviews will be scheduled.
June 10, 2009, Update: A review of records from the USACE Savannah District
revealed payments and additional companies associated with Mountain Chief. ACOE MentorProtege and Indian Incentive payment records to Caddell Construction were also requested.
ACOE project managers were interviewed and provided information related to the MentorProtege and Indian Incentive payments. Additional interviews and record reviews are planned.
(b)(6), (b)(7)(C)

September 10, 2009, Update: The RA and SA
met with (b)(6), (b)(7)(C)
DClS Asset Forfeiture to determine interest in the case. Records reviews were conducted to
identify assets held by individuals associated with Mountain Chief. On July 13, 2009, a request
for forensic accounting and telephonic analysis support was submitted and approved by (b)(6), (b)(7)(C)
(b)(6), (b)(7)(C)DCIS Asset Forfeiture following the identification of approximately ten businesses
and multiple bank accounts and credit cards associated with Mountain Chief. On August 24,
2009, (b)(6), (b)(7)(C) and (b)(6), (b)(7)(C) former owners Tufty Drywall were interviewed. The
interview revealed (b)(6), (b)(7)(C)
former Tufty Drywall President as the person responsible
for the agreements between Caddell Construction, Tufty Drywall and Mountain Chief. On
August 24, 2009 (b)(6), (b)(7)(C) former Tufty Drywall employee was interviewed. The interview
revealed the Power of Attorney process used to process paperwork between Caddell
Construction, Tufty Drywall and Mountain Chief. On August 27, 2009, (b)(6), (b)(7)(C)
former Contracting Officer Savannah District was interviewed and provided information
regarding Caddell Construction's use of the DoD Indian Incentive Program and Mentor-Protege
program. On August 28, 2009, the RA and SA (b)(6), (b)(7)(C)
met with the DoD Office of Small and
Disadvantaged Business Utilization to identify the procedures and paperwork required for
primary contractors to receive funds from the Indian Incentive Program and Mentor-Protege
program. The RA and SA (b)(6), (b)(7)(C)
also briefed the DoD Office of Small and Disadvantaged
Business Utilization on Caddell Construction's suspected abuse of the Indian Incentive Program
and Mentor-Protege program through its partnership with Mountain Chief.
December 10, 2009, Update: The RA and SA (b)(6), (b)(7)(C)
telephonically interviewed (b)(6), (b)(7)(C)
(b)(6), (b)(7)(C)
DoD Office of Small and Disadvantaged Business Utilization. (b)(6), (b)(7)(C)
discussed the Mentor-Protege and Indian Incentive programs as they pe1tained to payments made
to Caddell Construction. The DoD Office of Small and Disadvantaged Business Utilization also
provided all documentation related to Mountain Chief. Additional interviews are scheduled.

CLASSIFICATION:

FOR OFFICIAL USE ONLY
LAW ENFORCEMENT SENSITIVE

WARNING
This document Is the property of the Department of Defense Inspector General and is on loan to your
agency. Contents may not be disclosed to any party under investigation nor may this document be
distributed outside the receiving agency without the specific prior authorization of the Deputy Inspector
General for Investigations.

 3

200900551P-11-DEC-2008-40KC-E8
(b)(6), (b)(7)(C)

March 10, 2010, Update: On January 4, 2010, the RA and SA
conducted
(b)(7)(E)
between the Army Mentor-Protege Program Manager,
Mountain Chief and Caddell Construction. In the (b)(7)(E)
to Mountain Chief, Daniel
Chattin stated that his field employees received mentoring from Caddell Construction as pait of
the DoD Mentor-Protege Program. In the (b)(7)(E)
to Caddell Construction, Mark Hill
stated that Daniel Chattin received mentoring as part of the DoD Mentor-Protege Program.
(b)(6), (b)(7)(C)

On January 5, 2010, the RA and SA
interviewed (b)(6), (b)(7)(C)
and
(b)(6), (b)(7)(C)
all former Caddell Construction employees who reported hours to the DoD
Mentor-Protege Program. Agents were advised that the former employees had no knowledge of
individuals associated with Mountain Chief. Agents were also advised that all three individuals
did not provide mentoring to Mountain Chief employees as prnported on the timesheets
submitted to the DoD.
On January 14, 2010, the RA and SA (b)(6), (b)(7)(C)
conducted (b)(7)(E)
Tufly Drywall owner, Caddell Construction and
between (b)(6), (b)(7)(C)
(b)(7)(E)
Mountain Chief. In the
to Caddell Construction (b)(6), (b)(7)(C) stated that Caddell
Construction no longer works with Mountain Chief. In the (b)(7)(E)
to Mountain Chief,
Daniel Chattin described his small business contracting plans and ways to utilize DoD small
business programs to receive additional funds for use of Mountain Chief. Chattin also described
his methods used to pitch business partnerships to primary contractors that would allow the
primary contractor to earn small business contracting points through the use of Mountain Chief.

(b)(7)(E)

(b)(6), (b)(7)(C)

(b)(6), (b)(7)(C)

On February 11, 2010, the RA and SA
briefed AUSA
United States
Department of Justice regarding prosecution of this case. The Department of Justice accepted
the case for prosecution. Additional interviews and techniques are planned.
June 10, 2010, Update: Coordination for all contract documents related to the work
performed by Caddell Construction and Mountain Chief was made with the ACOE, Savannah
District Office. Preparations for future search warrants and interviews are being coordinated
with (b)(6), (b)(7)(C) United States Department of Justice.
September 10, 2010, Update: During the repmting period, several witness and subject
interviews were conducted. Following the subject interviews, repmts were forwarded to the
Depaitment of Justice to pursue possible charges and plea agreements. Techniques not
reportable in this format were also utilized during the reporting period.
December 10 2 2010 2 Update: During this reporting period, follow-on subject interviews
were conducted. Case agents met with the Department of Justice attorneys assigned to the case
to discuss the status of evidence and possible charges. Document reviews and techniques not
reportable in this format were also utilized during the reporting period.

CLASSIFICATION:

FOR OFFICIAL USE ONLY
LAW ENFORCEMENT SENSITIVE

WARNING
This document is the property of the Department of Defense Inspector General and Is on loan to your
agency. Contents may not be disclosed to any party under investigation nor may this document be
distributed outside the receiving agency without the specific prior authorization of the Deputy Inspector

General for Investigations.

 (b)(7)(E)

200900551P-11-DEC-2008

4

E8
(b)(6), (b)(7)(C)

March 10, 2011, Update: On December 22, 2010
former Caddell
Construction employee was interviewed. (b)(6), (b)(7)(C)
provided information regarding the payment
process used for Mountain Chief and individuals involved in the process.
(b)(6), (b)(7)(C)

Trial Attorney, Depaitment of Justice,
On January 19, 201 I,
(b)(6), (b)(7)(C)
Trial Attorney, Department of Justice and the investigative team met
(b)(5), (b)(6), (b)(7)(C), (b)(7)(E)
with Daniel Chattin (Chattin), Mountain Chief and his attorney for a
provided information regarding (b)(5), (b)(6), (b)(7)(C), (b)(7)(E)
(b)(5), (b)(7)(E)

(b)(6), (b)(7)(C)

On January 25, 2011, (b)(6), (b)(7)(C)
and SA
met with Mark Hill (Hill), Caddell
(b)(5),
(b)(6),
(b)(7)(C),
(b)(7)(E)
Construction and his attorney for a
(b)(5), (b)(6), (b)(7)(C), (b)(7)(E)

During the next reporting period, the case agents will conclude the preparation of
evidence for the Department of Justice to proceed with possible criminal charges against subjects
involved in the case.
(b)(6), (b)(7)(C)

June 10, 2011, Update: On April 12, 2011,
and his attorney for a (b)(5), (b)(6), (b)(7)(C), (b)(7)(E)

and SA (b)(6), (b)(7)(C)
met with Chattin

(b)(5), (b)(7)(E)

(b)(6), (b)(7)(C)

(b)(6), (b)(7)(C)

(b)(6), (b)(7)(C)

On May 17, 2011, the RA,
and SA
interviewed
(b)(6), (b)(7)(C)
(b)(6), (b)(7)(C)
who has previously been interviewed by the RA and SA
provided additional
(b)(7)(C)
details about (b)(6),
previous
employment with both Mountain Chief and Caddell Construction.
(b)(6), (b)(7)(C)
also provided detailed infotmation about the individuals and processes used for the DoD
Mentor Protege Program and Indian Incentive Program while working in the Caddell
Construction offices.
The case agents continued to prepare evidence for the Depaitment of Justice to proceed
with possible criminal charges against subjects involved in the case. The case agents will
continue this process during the next reporting period.
September 10, 2011, Update: The case agents continued to prepare evidence for the
Department of Justice to proceed with possible criminal charges against subjects involved in the
case. The case agents also coordinated with the Department of Justice to prepare evidence for
discovery in anticipation of upcoming criminal charges during the next reporting period.

CLASSIFICATION:
WARNING

FOR OFFICIAL USE ONLY
LAW ENFORCEMENT SENSITIVE

This document Is the property of the Department of Defense Inspector General and is on loan to your
agency. Contents may not be disclosed to any party under investigation nor may this document be
distributed outside the receiving agency without the specific prior authorization of the Deputy Inspector
General for Investigations.

 (b)(7)(E)

200900551P-11-DEC-2008-

-E8

5

December 10, 2011, Update: The Department of Justice requested additional interviews
of individuals whose names appeared on timecards submitted to the U.S. Anny Corps of
Engineers for payments related to the Mentor-Protege Program. During the reporting period, the
case agents interviewed 22 former and current Caddell Construction employees. The interviews
focused on the individual's knowledge of their timecards and the type of work reported for each
individual. The Department of Justice will determine the timeline for criminal charges during
the next reporting period.
March 10, 2012, Update: On January 19, 2012, Mark Hill (Hill) and Daniel Chattin
(Chattin) were charged by a federal grand jury as part of a four count indictment in the United
States District Court, Middle District of Alabama, Northern Division. Hill, Caddell Constmction
Company, was indicted on three counts of major fraud against the government in violation of I 8
U.S.C. § 1031 and one count of false statements in violation of I 8 U .S.C. § I 001. Chattin,
Mountain Chief Management Services, was charged with three counts of major fraud against the
government in violation of 18 U.S.C. § I 031. The indictment alleged that Hill and Chattin,
while aiding and abetting each other and aiding and abetting and being aided and abetted by
others known and unknown, were part of a scheme to defraud two Department of Defense
programs. Chattin and Hill engaged in a scheme to make and cause to be made numerous
material misrepresentations and omissions designed to mislead the United States into making
inflated payments to Caddell Constmction under the Mentor-Protege Program and the Indian
Incentive Program.
On January 24, 2012, Chattin was arrested by General Services Administration-Office of
the Inspector General agents following the issuance of an mrnst warrant, United States District
Court, Middle District of Alabama.
On January 25, 2012, Hill voluntarily surrendered in the Middle District of Alabama
following the issuance of an arrest warrant, United States District Court, Middle District of
Alabama.
The investigative team also prepared materials for discovery and will continue to do so
during the next reporting period.
June 10, 2012, Update: The investigative team is in the process of producing discovery
following the indictment of Hill, Caddell Construction, and Chattin, Mountain Chief
Management Services. The investigative team will continue to prepare discovery and coordinate
with the Department of Justice.
September 10, 2012, Update: The investigative team is in the process of preparing for
the trials of Hill and Chattin. The Department of Justice received a request from the defense to
continue the scheduled trial given the volume of discovery. The new trial date will be scheduled
sometime in the spring of 2013. The investigative team conducted trial preparation interviews of
Caddell Construction employees that included (b)(6), (b)(7)(C)
and (b)(6), (b)(7)(C)
CLASSIFICATION:

FOR OFFICIAL USE ONLY
LAW ENFORCEMENT SENSITIVE

WARNING
This document is the property of the Department of Defense Inspector General and is on loan to your
agency. Contents may not be disclosed to any party under investigation nor may this document be
distributed outside the receiving agency without the specific prior authorization of the Deputy Inspector

General for Investigations.

 (b)(7)(E)

200900551P-11-DEC-2008

E8

6

(b)(6), (b)(7)(C)

The investigative team also conducted a trial preparation interview of (b)(6), (b)(7)(C)
from the Depaitment of Defense, Office of Small Business Programs. A suppression hearing is
also scheduled for September 19, 2012 in the Middle District of Alabama. The investigative
team will continue to conduct trial preparation interviews during the next reporting period.

December 10, 2012, Update: During the reporting period, a suppression hearing was held
in the Middle district of Alabama. The investigative team awaits a ruling from the court.
Discussions between the Department of Justice and Caddell Construction were also held to
determine potential settlements in the investigation.
During the next repmting period, the investigative team plans to meet with the Department
of Justice trial attorneys for trial preparation.

March 10, 2013, Update: During the repotting period, the investigative team and the
Department of Justice trial attorneys met with witnesses who will testify at the trials of Hill and
Chattin scheduled for April 22, 2013 in the Middle District of Alabama. The witnesses included
(b)(6), (b)(7)(C)
Army Office of Small Business Programs, and (b)(6), (b)(7)(C)
(b)(6), (b)(7)(C)
United States Army Corps of Engineers.
(b)(6), (b)(7)(C)

former
United States
On March I, 2013, (b)(6), (b)(7)(C)
(b)(6),
(b)(7)(C)
(b)(6),
(b)(7)(C)
Army Corps of Engineers, was interviewed.
was the
assigned to a
(b)(6), (b)(7)(C)
contract in which Caddell Construction billed for DoD Mentor(b)(7)(C)
Protege Program funds. (b)(6), (b)(7)(C)provided information about (b)(6),
role
on the contract and
interactions with Caddell Construction and Mountain Chief.
During the next reporting period, the trials of Hill and Chattin will take place in the Middle
District of Alabama.

June 10, 2013; Update: During the reporting period, the trials of Hill and Chattin were
rescheduled. The trials will begin in the Middle District of Alabama on July 22, 2013.
September 10, 2013; Update: During the reporting period, the trials of Hill and Chattin
took place in the Middle District of Alabama. The jury found Hill guilty on one count of false
statements in violation of 18 USC 1001. Prior to jury deliberation, the case against Chattin was
dismissed under a Rule 29 motion. Sentencing for Hill will occur during the next reporting
period.
December 10 2 2013; Update: During the reporting period, Hill was sentenced in the
Middle District of Alabama. Hill was sentenced to (b)(6), (b)(7)(C), (b)(7)(E)
Hill also received a
(b)(6), (b)(7)(C), (b)(7)(E)
During the next reporting period, the RA will coordinate
with U.S. Army officials regarding possible administrative actions.

CLASSIFICATION:
WARNING
This document is the property of the Department of Defense Inspector General and Is on Joan to your

FOR OFFICIAL USE ONLY
LAW ENFORCEMENT SENSITIVE

agency. Contents may not be disclosed to any party under Investigation nor may this document be
distributed outside the receiving agency without the specific prior authorization of the Deputy Inspector

General for Investigations.

 (b)(7)(E)

200900551P-ll-DEC-2008-

E8

7

April 10, 2014; Update: During the reporting period, the case review schedule was
changed and will occur every 90 days from this date.
(b)(6), (b)(7)(C)

Office of
During the reporting period, the RA coordinated with
(b)(6),
(b)(7)(C)
Counsel, U.S. Army Corps of Engineers, Savannah, Georgia
will assist with
administrative recommendations for the suspension and/or debarment of Hill, Chattin, Caddell
Construction, and Mountain Chief.
(b)(6), (b)(7)(C)

SA
also discussed some investigative findings regarding Mountain Chief's small
business certifications with SA(b)(6), (b)(7)(C) (SA (b)(6), (b)(7)(C)
SBA. During the next reporting period,
(b)(6),
(b)(7)(C)
the investigative team will send SA
a summary of the case and relevant documents that
pertain to Mountain Chief's small business certifications. SA (b)(6), (b)(7)(C)
plans to discuss Mountain
Chief Management Services' small business certifications and possible administrative actions
with SBA legal counsel.
(b)(6), (b)(7)(C)

July 10. 2014; Update: On July 7, 2014, the RA coordinated with
and edited the
package to submit regarding recommendations for the suspension and/or debarment of Hill,
Chattin, Caddell Construction, and Mountain Chief. (b)(6), (b)(7)(C)
will finalize the document for
submission.
Due to other investigative priorities, information has not been collected and sent to SA
The investigative team will wait for a determination from the Army for administrative
actions. The investigation will remain open until a decision is made regarding administrative
actions for the involved subjects.

(b)(6), (b)(7)(C)

(b)(6), (b)(7)(C)
(b)(6), (b)(7)(C)

Prepared by: SA
DISTR: GSA-OIG

Kansas City POD

(b)(6), (b)(7)(C)

APPR:

CLASSIFICATION:
WARNING

FOR OFFICIAL USE ONLY
LAW ENFORCEMENT SENSITIVE

This document is the property of the Department of Defense Inspector General and is on loan to your
agency. Contents may not be disclosed to any party under investigation nor may this document be
distributed outside the receiving agency without the specific prior authorization of the Deputy Inspector

General for Investigations.