FBI raids Lexington asphalt company, seeks data on ‘conspiring to rig’ bids

Federal investigators raided a Lexington paving and asphalt company in late March seeking information on bids and the sales of asphalt to paving contractors, documents filed in federal court in Lexington show.

FBI officials seized 38 items March 22 from ATS Construction and its subsidiaries on Atkinson Avenue in Lexington. Items seized included invoices, asphalt sales paperwork, several computers, servers, reports from ATS asphalt terminals, and other hardware and software. The affidavit attached to the search warrant asked for any data related to the “sale of asphalt or the bidding process for asphalt paving contracts from Jan. 1, 2010, through the date the search warrant is executed.”

The search warrant also asks for any computers or data storage used as a means to commit the offense described in the warrant affidavit, “including conspiring to rig asphalt paving bids.”

ATS Construction, ATS Asphalt Sales, L-M Asphalt Partners and L-M Holdings, and several related companies are owned by Steve Lawson, according to records filed with the Kentucky Secretary of State. The affidavit mentions Lawson, but only by last name. Steve Lawson’s father, Leonard Lawson, was acquitted of charges related to bid-rigging in late January 2010. In that case, federal officials alleged that top state highway officials leaked confidential bid estimates to Leonard Lawson from 2006 to 2007 for state road contracts worth more than $130 million. A federal jury acquitted the elder Lawson and a former state highway official of all charges after a two-week trial.

Leonard Lawson is not listed as an officer in ATS Construction or L-M Asphalt Partners. He is a manager in an affiliated company, ATS Holdings LLC, according to records filed with the secretary of state.

Officials with ATS did not immediately return phone calls seeking comment.

The search warrant at ATS was executed the same day the state Transportation Cabinet received a grand jury subpoena about state road contracts. State transportation officials confirmed Monday that the FBI was conducting an anti-trust investigation involving road contracts.

Employees at the Kentucky Transportation Cabinet were ordered March 29 to preserve all documents, communication and data they have relating to the cabinet’s construction, paving or asphalt projects.

The subpoena asks cabinet employees to preserve all data dating to 2010, including data from the administration of former Gov. Steve Beshear. Gov. Matt Bevin took office December 2015.

ATS has an asphalt plant on Jaggie Fox Way. ATS also has a separate paving company called L-M Asphalt Partners.

Federal investigators seized the subcontract agreement between ATS and L-M Asphalt Partners and a subcontract agreement between the asphalt company and one of its competitors, Hinkle Contracting, the search warrant shows.

Larry Winkleman, the president and CEO of Hinkle Contracting, said Tuesday, “I really don’t have any comment.”

Among the documents the FBI wanted included bids, purchase order contracts, appointment records, telephone or travel records related to “any asphalt paving company that has purchased or attempted to purchase asphalt from ATS.”

A spokesman for the U.S. Attorney for the Eastern District of Kentucky has said the office can neither confirm or deny a federal investigation into alleged improprieties involving paving.

One of the items seized by the FBI included bid documents relating to a city of Lexington project at Coolavin Park on West Sixth Street.

Susan Straub, a spokeswoman for the city, said Mayor Jim Gray’s office has not been notified of the investigation. Straub said ATS was the low bidder in 2014 for a trail project that goes along Coolavin Park.

“The contract with ATS for the rail trail was initially for $438,680, which was reduced via change order to $415,872 at the end of the project. It was basically a trail-building project where they had to do a little sewer inlet work, grade, excavate and put down some asphalt.”

ATS also bid on a contract for a parking lot at Coolavin but was not the low bidder and did not receive the contract, Straub said.

This story was originally published April 4, 2017 at 3:19 PM with the headline "FBI raids Lexington asphalt company, seeks data on ‘conspiring to rig’ bids."