Vallejo contractor charged with fraud on Lawrence Berkeley Lab work
Derf Butler, a Vallejo resident who is president of San Francisco-based Butler Enterprise Group, was indicted last week on charges of conspiracy to defraud the U.S. Department of Energy in connection with a renovation project at Lawrence Berkeley Lab.
On April 6, the U.S. Department of Justice charged Butler, 53, along with three other defendants, with conspiracy to defraud the government on the Lawrence Berkeley Lab renovation. The other defendants were Anton Kalafati, 33, president of B Side Inc. in San Francisco; Clifton Burch, 49, president of Empire Engineering and Construction in San Francisco and Oakland; and Peter McKean, 48, vice president of Townsend Management in San Francisco.
Butler and Kalafati were also charged with making false statements to agents of the FBI and Department of Energy.
The indictments were part of three illegal-contract-bidding schemes outlined by the DOJ involving a total of eight defendants, who are scheduled to make initial appearances before a U.S. magistrate judge in San Francisco on Monday, April 17.
The North Bay Business Journal contacted Butler on April 10 regarding the DOJ allegations.
'No comment,' Butler said, noting that he hired an attorney to represent him in the case. 'I'm meeting with her this morning.' Butler said, indicating that his attorney may be able to add information.
An indictment alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted of fraud, the defendants face maximum statutory sentences as follows:
Each violation of Title 18, United States Code, Section 371 and Title 18, United States Code, Section 1001(a)(2) carries a maximum penalty of five years imprisonment, a three-year term of supervised release, a $250,000 fine, and a $100 special assessment. Each violation of Title 18, United States Code, Section 666(a)(1)(B) carries a maximum penalty of 10 years imprisonment, a three-year term of supervised release, a $250,000 fine, and $100 special assessment. Any sentence would be imposed by the court after consideration of U.S. sentencing guidelines.
On the Lawrence Berkeley Lab project, 'these defendants agreed to take steps to ensure that the same 'developer' won the contract,' according to a statement from the DOJ. 'Defendants colluded to submit bids for the Lab building renovation from B Side Construction, Empire Engineering and Construction, and Townsend Management,' the DOJ said. 'Each company was to submit bids in amounts dictated by the developer and for the purpose of ensuring that the developer's bid was the lowest bid on the contract…. The indictment alleges that the defendants engaged in this conspiracy in order to gain financial reward or construction work from the developer,' the DOJ said.
The website of Butler Enterprise Group described Derf Butler as 'an innovative and visionary leader with more than 18 years of experience, successfully promoting business and community development. He is a result driven individual with a passionate commitment to providing an opportunity for individuals and small businesses,' the website stated. 'His strong track record of success through cultivation of project stakeholders, can-do approach and focus on strategic solution are at the heart of what makes Butler Enterprise Group, LLC a leader in Small Business Program Management,' the website said.
The website lists other projects of Butler Enterprise Group, including the Hunters Point Shipyard, the Central Subway Project with the San Francisco Municipal Transportation Agency, and Mission Bay development.
James Dunn covers technology, biotech, law, the food industry, and banking and finance. Reach him at: james.dunn@busjrnl.com or 707-521-4257
