Construction company owner sentenced for filing false claims

PROVIDENCE – The owner of Alhambra Building Company has been sentenced to two years probation for failing to pay workers prevailing wages and filing false claims in order to collect more than $1.8 million in federal funds during a West Warwick textile mill renovation project.
Donald F. Ihlefeld, 71, of Cranston, was sentenced Tuesday by U.S. District Court Judge John J. McConnell Jr.
He also was ordered to perform 200 hours community service and to provide $20,000 to the Rhode Island Foundation to support programs that assist immigrant programs in Rhode Island.
According to a press release from U.S. Attorney Peter F. Neronha, an investigation by the Department of Health and Human Services, Office of Inspector General and the U.S. Attorney’s Office determined that Ihlefeld falsely represented that he paid employees locally prevailing wages – approximately $34 an hour – for work performed during the renovation project of the former mill building into a walk-in health center.

Known as the Cotton Shed Project, the project was funded in part by the American Recovery and Reinvestment Act of 2009, through grants provided by the U.S. Department of Health and Human Services, Health Resources and Services Administration.

According to court documents and information presented to the court, in October 2010, Thundermist Health Center, a nonprofit community health center, awarded a contract to Alhambra Building Company in Warwick as construction manager for the project. As a condition of payment, as required by the stimulus program pursuant to the Davis-Bacon Act, Alhambra was required to pay laborers no less than locally prevailing wages plus benefits.

Ihlefeld submitted invoices for payment for construction work performed by his company from December 2010 through January 2011 totaling approximately $1.8 million dollars, knowing that he and his company failed to pay employees local prevailing wages.
Additionally, during the same time frame, Ihlefeld and his company submitted false certified payroll reports to Thundermist which misrepresented the identity of employees working on the project, total hours worked by employees and that it was paying Davis-Bacon wages to employees working on the project. The employees Alhambra failed to pay the appropriate wages were non-citizen, Spanish-speaking employees hired by Alhambra.

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