Head of raided Tahoe company denies fraud
April 7, 2014
The head of a South Lake Tahoe cement company denied Friday that his firm was involved in any fraud related to government construction projects, and he's confident that investigators who raided the business will eventually agree with him.
"This is the worst thing that ever happened in my life," Mike Wallace of Sierra-Tahoe Ready Mix Inc. said of the raids by a dozen investigators at his home and 10 investigators at his business on Thursday. "But I showed them I didn't give any bad concrete to anyone."
Wallace said the investigators, led by the El Dorado District Attorney's Office, served him with a warrant seeking many financial records, his concrete mix design documents and other materials, but left only with the mix documents, which include the formulas used in a computer program that determines exactly what goes into all batches of concrete produced at his plant. He said those mix designs are the same ones used by his main supplier, Bing Materials in Gardnerville.
Sierra-Tahoe Ready Mix has provided the concrete for many big projects on the South Shore, including the Chateu project at the California-Nevada line, several school buildings, the Aspens at South Lake affordable housing project, a Pioneer Trail improvement job and other projects in recent years. In all cases, Wallace said his materials were routinely inspected and never found to be faulty.
"They constantly test," he said. "I haven't had one bad test result."
Wallace also said investigators asked him about a mix design that originally had Bing Materials' letterhead on it. He had put his own company letterhead over the Bing name, but added he was merely doing a cut-and-paste job because it was convenient, and the formula was the one followed for a particular job.
"We're all devastated by this," he said of the raid and statements by city officials. "I have a good reputation. I'm an honest person."
"I've been using the same formulas for years, and they all work," he added.
According to a city news release on Thursday, an investigation began after city public works engineers learned that Sierra-Tahoe Ready Mix was "possibly issuing false or fraudulent documents relating to government construction contracts."
City engineers notified the South Lake Tahoe Police Department, and District Attorney Vern Pierson was brought into the case because of concerns about "implications for city, county and state government entities," according to the press release.
City Manager Nancy Kerry said the implications could be "staggering," and praised investigators for quick action that "ensured no further harm to the public."
Wallace said he hoped to talk with Kerry, adding that her comments were "disturbing" and "freaking the town out." He added he hasn't contacted a lawyer yet and was in a waiting mode pending more information from officials.
The city also has recommended that anyone who bought concrete from Sierra-Tahoe Ready Mix get verification from an independent source regarding the quality of the concrete. Wallace said he anticipates no problems if such verifications are sought.
"I never cheated anyone," he said, adding, "This isn't what happened. But it's going to take a lot of work" to get that message across.