Palm Beach County Overpaid Air Conditioning Contractor $70,000, Ethics Report Says

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Palm Beach County overpaid an air conditioning contractor nearly $70,000 over a period of nearly six years, the inspector general’s office has found.

An investigation by the watchdog found that from July 2013 to March 2019, Commercial Cooling Concepts overcharged the county by $69,583.49 by inflating the cost of materials through the use of a “shell company.” , according to the agency report.

The OIG reviewed over $1 million in invoices for possible fraud.

“It appears that Commercial Cooling used a shell company solely as a middleman to overcharge the county,” the watchdog agency said in a Sept. 6 statement on behalf of Inspector General John Carey.

He said he previously referred the matter to the Palm Beach County Sheriff’s Office, the FBI and the US Attorney’s Office for further review. The attorney representing the company wrote in a response to the OIG report that the law enforcement reviews were completed with no charges filed.

A spokesperson for the sheriff’s office confirmed Thursday that the agency had closed its investigation without pressing charges. An FBI spokesman said he could not confirm an investigation. Federal court records showed no charges against the company or its president, Joseph Butkiewicz.

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Contractor lawyer calls OIG report ‘false and defamatory’

In a notice of intent to sue Thursday to Stuart Robinson, the inspector general’s director of investigations, Commercial Cooling’s attorney called the agency’s report “false and defamatory” and said it “will cause substantial commercial damage to my client for which the County will be liable.”

Attorney Michael Pike wrote that Riviera Beach-based Commercial Cooling continues to provide services for the county, including at its Main and North Courthouses, the West County Jail and the County Processing Facility. the water.

“Why would the county continue to employ a company that has increased its bill and is under investigation? Pike wrote.

According to the OIG report, the agency began investigating in March 2018 after receiving a whistleblower complaint alleging that Commercial Cooling Concepts requested and received reimbursement for materials it claimed to have purchased from a supplier that was actually a front company set up by Butkiewicz.

The whistleblower alleged that Commercial Cooling falsely claimed that a company called HVAC OEM was its original manufacturer and supplier for materials supplied to the county.

“During our investigation, Joseph Butkiewicz, the president of Commercial Cooling and HVAC OEM, admitted that HVAC OEM never sold anything to Commercial Cooling,” the OIG report said.

Butkiewicz reportedly said in a January 2021 interview with sheriff’s investigators that he created “lots” for parts through the HVAC OEM instead of submitting an invoice for each part on a particular job.

In a separate interview with the OIG, Butkiewicz said he inflated the cost of materials to recover expenses unrelated to parts that the county had not reimbursed, according to the report.

The OIG said its investigation found that Commercial Cooling submitted 521 invoices during the reported period, misrepresenting the HVAC equipment supplier as the source of materials supplied to the county.

Watchdog reports hundreds of bills had inflated costs

The agency reviewed invoices from the county’s Facilities Administration and Airports departments and compared 179 invoices attributed to the alleged shell company to actual Commercial Cooling suppliers.

In cases where it was able to match invoices to actual vendors, the OIG found that Commercial Cooling inflated material costs, according to the report.

During its investigation, the OIG observed a site located at a listed address for HVAC equipment manufacturers along Silver Beach Road in Lake Park. Investigators found a building consisting of storage units, but no signage or markings indicating that the air conditioning company used that address.

The City of Lake Park reported that no business tax receipt was issued to CVC’s OEM from an address in the city.

In his response, Pike wrote that Commercial Cooling moved from its Lake Park location to Riviera Beach around August 2014.

“Consequently, you and your surveillance team were conducting surveillance on buildings that you knew full well were not leased by CCC or OEM,” Pike wrote.

Pike wrote that some jobs required hiring a crane company, which resulted in additional expense for commercial cooling.

“There was no separate invoice for payment provided directly to the county by a crane company,” Pike wrote. “As such, there was no double billing.”

Pike also wrote that the county knew Commercial Cooling was using OEMs to purchase parts and approved of the practice as long as the parts were billed at cost.

According to the OIG report, the county accepted the agency’s recommendations to take steps to recover the $69,583.49 and review procedures to ensure contractual cost reimbursement provisions are met.

Julius Whigham II is a criminal justice and public safety reporter for The Palm Beach Post. You can reach him at [email protected] and follow him on Twitter at @JuliusWhigham. Help support our work: Subscribe today.

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