Johnstown man faces five years, $250K fine for fraud
A Johnstown man who pleaded guilty March 27 to defrauding a federally funded program could face up to five years in prison and a $250,000 fine.
According to a press release from the U.S. Department of Justice, Eric M. Rader, 36, pleaded guilty in U.S. District Court to one count of conspiracy to commit fraud for submitting fraudulent bills in connection with a federally funded job-training program.
According to court documents, Rader was a recruiter and apprenticeship manager for Building Trades Institute in Delaware from February 2009 to December 2010.
BTI receives funding through the American Recovery and Reinvestment Act for Project HIRE, a program to help connect and encour-age employers in targeted growth industries who had current job openings to hire dislocated workers who had or were close to having the necessary skills to fill those positions.
According to the Justice Department document, "Rader forged the signature of an officer of a job-leasing company official on a letter claiming jobs existed for people who were to receive solar-panel installation training through BTI, knowing that such jobs did not exist."
Rader sent an invoice to the program for $66,000, which had the names of students who received training prior to Project HIRE starting, making them ineligible for Project HIRE funds, according to the Justice Department document. The students never received solar-panel installation training, which would have resulted in an Industry Recognized Certificate, which Project HIRE requires.
Rader pleaded guilty before U.S. District Judge Michael H. Watson to one count of conspiracy to commit mail fraud, which is punishable by up to five years in prison, a fine of up to $250,000 and three years of supervised release. The plea agreement also calls for Rader to make restitution.
The court will conduct a presentence investigation before determining the sentence and will schedule a date for sentencing.
Fred Alverson, public-information officer for the Justice Department, said the presentence investigation would take 30 to 60 days.
"We don't know when the sentencing will occur," he said.
Alverson credited Delaware County Job and Family Services with getting the investigation started. He said DJFS administers the grant and has checks and balances in place to detect fraud.
"In administering it, they saw something that didn't look right," Alverson said.
He said Delaware County referred the incident to the U.S. Department of Labor, which eventually led to Rader pleading guilty.
U.S. Attorney Carter Stewart said the investigation is continuing and commended the investigation by Department of Labor and FBI agents, as well as financial-crimes chief Brenda S. Shoemaker, who is representing the United States in the case.