Prosecutors: Engineering firm stole from Lehigh Valley municipalities

Three executives of a Doylestown engineering firm will face trial in Montgomery County Court on charges they stole more than $2 million from clients including nearly a dozen municipalities in the Lehigh Valley and Poconos.

The Pennsylvania attorney general’s office filed racketeering, theft by deception and related charges in December against the former owner of Boucher & James, Ross Boucher, 58, of Venice, Florida, engineer Mark Eisold, 57, of Warminster, Bucks County, and former business development director David Jones, 57, of Lower Gwynedd, Montgomery County.

After preliminary hearings Friday for Boucher and Eisold, District Judge Katherine E. McGill in Oreland, Montgomery County, cleared the charges for trial. Jones waived his preliminary hearing, his lawyer said.

Prosecutors allege the executives oversaw a scheme to pad their employees’ time reports to drive up labor costs for projects. More than 150 clients, including numerous municipalities, school districts, government authorities, churches and nonprofit groups, were overbilled, prosecutors say. In one instance, the company billed for 34 hours worked by the same employee in a single day.

In the Lehigh Valley and Poconos, victims included Smithfield Township, Pocono Township, Lower Saucon Township, Wilson, Delaware Water Gap, Upper Saucon Township, Bushkill Township, Hellertown and Bethlehem. The amounts allegedly overbilled for those municipalities ranged from more than $57,000 to $142.

Attorney Thomas Burke, who represents Boucher, said prosecutors called several witnesses Friday, including engineer Jon Tresslar, who first took his concern about billing practices at the firm to the company’s board in 2018 and later to the attorney general’s office. Burke said the evidence heard Friday was contradictory, noting that the court heard testimony that the firm wrote off billable hours worth $1 million for its clients.

“That seems somewhat contradictory to me, I’m not sure how a jury would see that,” he said.

Burke also noted that Boucher sold his interest in the company in 2012. The statute of limitations for the crimes Boucher is charged with is five years, he said.

“As far as I’m concerned the attorney general’s office is knowingly prosecuting a person who is outside the statute of limitations,” Burke said.

Boucher remained chairman of the company’s board of directors until February 2018.

Steven Fairlie, who represents Jones, said his client is the least culpable of the three and is cooperating with investigators, who have already dropped some of the charges against him.

“I don’t think there’s any evidence that he was going in and revising bills higher than they were,” Fairlie said.

Eisold’s attorney Mark Cedrone did not return a call Friday.

According to court documents, Tresslar told attorney general’s office agents that he discovered fictitious hours were being added to client invoices to increase the company’s revenue. When he asked the company’s other managing directors to review the firm’s billing practices, they refused.

Tresslar was responsible for providing services to all of the firm’s private sector clients. In 2017, he reviewed a bill from Eisold for a private client and noticed that the amount billed to the client was significantly higher than the fees generated by the hours employees had worked on the projects, an affidavit supporting the charges says.

After finding the discrepancy, Tresslar went to the firm’s accounting department and obtained drafts of the bills and discovered that Eisold had jotted numbers to be added to the hours worked for each employee on the projects. Comparing the drafts to the time cards for each employee, he saw that the hours Eisold added had never been documented by the employees, the affidavit says.

Tresslar discussed his findings with the head of the firm’s accounting department, who told Tresslar, Eisold, “adds hours all the time,” according to the court documents.

He then reviewed bills for two of Eisold’s largest municipal clients and discovered hundreds of hours that had been billed but never worked. When he brought his findings to the attention of the other managing directors, Jones told him, “I thought this had stopped,” according to the affidavit.

Investigators also spoke to the head of the company’s accounting department, Gaye Singley, who told agents that Boucher had implemented a three-factor billing system in which the company charged clients three times the actual labor cost so that an employee making $50 an hour would be billed to a client at $150 an hour.

Adding hours not worked was one way of achieving the higher billing rate, the affidavit says. She said Boucher told her to devise a way to use the firm’s accounting software to add hours to invoices without adding them to timesheets, court documents say.

Another engineer told investigators that Jones had approached him and asked him to consider using “value added billing” for a municipal project, explaining that he could bill a percentage of the value of a project. The engineer told investigators he refused and told Jones what he was suggesting was fraud, court documents say.

A project inspector whose job was to visit project worksites to confirm work was proceeding according to plan told investigators Eisold instructed him during inclement weather to bill for erosion control inspections even if he didn’t go out to the site.

Forensic accountants for the attorney general’s office reviewed the company’s records and accounting software from 2009 to 2018 and determined that in addition to overbilling clients, managing directors received bonuses they would not otherwise have received. The inflated revenue of the company also resulted in Boucher and other shareholders receiving a higher price for the company when employees purchased it through an employee stock ownership plan in 2012, court records say.