Construction executive gets 6 1/2 years for set-aside fraud scheme

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Milwaukee construction executive Brian Ganos was sentenced to serve six-and-a-half years in prison on Monday for orchestrating a decade-long scheme that exploited programs used to help minority companies win construction contracts.

Ganos pleaded guilty to two fraud counts under a plea deal in June after he was indicted in April 2018 for secretly controlling a web of companies to obtain set-aside contracts, a plot that netted his firms more than $250 million over a dozen years.

Various companies controlled by Ganos — beginning with Sonag Construction and including Nuvo Construction, Sonag Ready Mix and others — have worked on some of the best-known projects in the state, including the Northwestern Mutual Tower and Commons and the Fiserv Forum.

Meanwhile, Ganos, who is Hispanic, enjoyed a reputation as a businessman who had built a flourishing career with help from the very same set-aside programs that he was covertly exploiting.

U.S. District Judge Pamela Pepper, during the sentencing hearing on Monday, said Ganos’ fraud prevented an untold number of other small-business owners from using their status as disadvantaged businesses to win construction work. Ganos, according to prosecutors, was able to collect between $10 million and $15 million in profits from at least 245 set-aside contracts.

“There are so many ways in which this kind of conduct undermines the goal of making sure everyone comes to the table with at least a shot,” Pepper said.

Officials from various agencies — including Milwaukee County, the Wisconsin Department of Transportation and others — had seen red flags for years. Ultimately, though, it took a five-year investigation to uncover the extent of Ganos’ fraud.

Ganos founded Sonag Construction as a minority contractor. But as the company’s set-aside certification was about to expire, Ganos began setting up new businesses. Companies such as Nuvo Construction, C3T, Pagasa and Sonag Ready Mix were purported to be operated independently. But they shared offices, equipment and profits and had Ganos as their secret owner.

The prison term Ganos was sentenced to on Monday was exactly in line both with what prosecutors had recommended and what they said they’d seek in their plea deal. Stephen Hurley,Ganos’ attorney, said the conviction will most likely prevent Ganos from working on government contracts once he’s out of prison.

Ganos had sought a sentence of only between a year and 15 months. But Pepper said so light a punishment wouldn’t have been consistent with sentences handed down for other white-collar criminals in Wisconsin.

In addition to his time in prison, Ganos must serve two years on supervised release, pay a fine and forfeit more than $500,000 in cash, property and luxury cars. Under a deal he reached with prosecutors, Ganos agreed not to contest the government’s seizure of more than $2 million in cash, a Colorado condo, company offices on West Florist Avenue in Milwaukee and other goods.

During the sentencing hearing, Ganos expressed gratitude for the support he received from his family during the criminal investigation.

“All I can do at this point forward is to be the best husband and father that I can be,” he said.

Pepper ordered that Ganos voluntarily report to prison on March 6, following the expected conclusion of another federal criminal case he’s fighting. In early November, he was indicted for three counts of possession of child pornography, charges that carry a mandatory minimum sentence of five years in prison, Pepper said. Ganos has pleaded not guilty in that case and a trial is scheduled for early March. Follow @natebeck9