Styx Trucking owner guilty in Boggs fraud case

Aug. 09, 2014 @ 12:58 PM

Another defendant in a fraud case involving Boggs Paving entered a plea deal in federal court Friday.

John "Styx" Cuthbertson, owner of Styx Trucking, pleaded guilty to one count of federal conspiracy, WSOC reported. He is the fourth to enter a plea out of of eight defendants. Last month, Greg Tucker, Boggs project manager, and Kevin Hicks, Bogg's chief financial officer, entered guilty pleas. Another project manger, Arnold Mann, pleaded guilty in May.

Federal investigators indicted eight defendants last summer, which included Boggs Paving, Styx Trucking and Carl "Drew" Boggs III. Prosecutors allege officials with Boggs and Styx defrauded the U.S. Department of Transportation, N.C. Department of Transportation and S.C. Department of Transportation out of $87 million from 2003 to 2013. Using Styx Trucking's status as a minority-owned business, investigators stated Boggs Paving got Disadvantaged Business Enterprises (DBE) from the state and federal government. But instead of Styx employees doing the work, the trucking company was given a kick-back while most of the money went to Boggs Paving. The indictment states that Boggs Paving employees staged situations to make it appear that Styx employees were the ones doing the work.

Earlier this week, federal prosecutors responded to the defense's joint motion to dismiss.

US officials argue that DBE money was funneled through an account in Styx Trucking's name. Most of the money went to Boggs Paving, but Styx Trucking was paid for use of its status, the motion states.

"As a result, Styx generally got two checks from Boggs Paving every two weeks: one check for actual work he had performed less his expenses and one check as a kickback for allowing Boggs Paving to run payments through his name," the prosecutor's response states.

In the motion to dismiss, defendants allege they were open about the arrangement with NCDOT and SCDOT officials. But federal prosecutors argue that state and federal transportation officials were deceived into awarding the DBE contracts to Styx even though it did none of the work.

The motion mentions a 2008 contract for a job in Stanly County where NCDOT officials questioned the amount of work Boggs said Styx did. After some meetings, Styx employees did begin doing work on that project, but prosecutors argue Boggs officials inflated the estimated work more than three times the actual amount.