Elaine Martin, awaiting sentencing next week on fraud charges, has been ordered to pay back the profits she made off nearly three dozen highway improvement contracts that were obtained fraudulently.
U.S. Chief District Judge B. Lynn Winmill found that Martin, the president of Meridian guardrail provider MarCon Inc., lied about her income and assets in obtaining contracts that were supposed to go to small, disadvantaged companies.
A federal jury found Martin guilty in September on 22 counts of mail fraud, wire fraud, conspiracy and filing false tax returns. Winmill, who oversaw the trial, will sentence her during a two-day hearing from 3:30 to 5 p.m. on Wednesday and Thursday.
Martin faces between two years and 20 years in prison for each of the counts.
Martin participated in two programs offered by the federal Small Business Administration and the U.S. Department of Transportation.
Under the SBA program, a number of federal contracts were set aside from the agencys normal competitive bidding process in order to help businesses considered socially and economically disadvantaged. Contracting officers negotiated the contracts through one-on-one meetings with certified companies such as MarCon.
Under the transportation program, a certain percentage of federal funds targeted for highway improvement projects went to program participants.
From 1997 to at least 2008, Martin submitted fraudulent tax returns and financial information to programs in Idaho and Utah, according to court documents. The two states approved contracts based on the financial information provided by Martin.
To the extent that MarCon enjoyed market dominance in Idaho, the very manner in which the (SBA) program operated meant Martins fraudulently obtained status buttressed that dominance, such as through the setting of goals and discouraging bidding by other nonqualified subcontractors, Winmill wrote in his 11-page decision issued last month.
The $3.1 million represents the profits Martin made from her fraudulent actions. Her attorneys successfully argued that Martin could not be asked to pay back the entire amount of the 33 contracts, only the money she earned off of them.
Winmill found that the 33 contracts totaled $14.2 million, with profits of $4.1 million. Martin must pay back a proportion of that profit equal to her 75.3 percent ownership stake.
The money judgment is directly proportional to the illegal conduct: It represents the proceeds that Martin would not have obtained but for her fraud, Winmill wrote.
Investigators were unable to locate money that could be seized from Martin to satisfy the forfeiture order. The Statesman reported in November that Martin had been trying to sell jewelry, a motorcycle and her home on North Hickory Way in Meridian to pay her attorneys. In August, she signed a promissory note that provided her with up to $400,000 from her son Tory.
As a result, Winmill ordered the seizure of eight parcels of property owned by Martin.
The largest is MarCon's corporate headquarters at 1881 W. MarCon Way in Meridian. The property contains nearly 14 acres of land and a 17,993-square-foot building, and is valued at $2.1 million, according to the Ada County Assessor's Office.
Other seizures include Martin's home, a house and an adjoining parcel on Morning Drive along Lake Cascade in Donnelly, and undeveloped Eagle lots on West Moon Valley Road and West Half Moon Lane.
Martin, who once served as president of the Idaho Associated General Contractors lobbying group, was jailed in November after violating a release agreement issued after her conviction.
Co-defendant Darrell Swigert, a MarCon investor and one-time live-in boyfriend of Martin, was convicted of obstruction of justice for helping Martin cover up her crimes. He is scheduled to be sentenced March 19.
John Sowell: 377-6423, Twitter: @IDS_Sowell