U.S. District Judge Ursula Ungaro, Southern Distrtict of Florida. Photo by J. Albert Diaz.

Two South Florida construction company executives will serve more than three years in federal prison for shortchanging their workers and lowballing public housing project bids.

Brothers Javier Estepa and Diego Alejandro Estepa Vasquez were accused of defrauding Miami-Dade County to land more contracts for repairs and renovation work.

U.S. District Judge Ursula Ungaro in Miami sentenced Estepa to four years and four months in prison and Estepa Vasquez to three years and five months.

Attorneys for Estepa, 48, and Estepa Vasquez, 37, said they will fight for shorter sentences on appeal, arguing the judge incorrectly calculated the monetary loss in the fraud, which drives the sentencing guidelines.

The brothers were indicted for allegedly undercounting the number of employees needed to work on projects and the hours worked.

The underestimates allowed them to artificially deflate workers' compensation insurance premiums, payroll taxes and other costs, which in turn allowed them to artificially deflate their bids, according to a second superseding indictment.

The shortcuts gave them a leg up because the county Department of Public Housing and Community Development, which administers federal Section 8 and public housing funds, hires contractors with the lowest bids as long as they meet contract conditions and terms.

The trial revealed the brothers underpaid workers and didn't pay overtime as required by the Davis–Bacon Act. The 1931 law mandates workers on federally funded projects be paid at least the local prevailing wages.

The brothers also hired subcontractors despite telling the county they wouldn't and paid them a flat rate instead of an hourly wage, federal prosecutors charged.

Estepa of Davie and Estepa Vasquez of Boca Raton were charged with running the scheme from June 2014 to December 2016 as heads of Hialeah Gardens-based Aaron Construction Group Inc. The county transferred more than $3.9 million to the company where Estepa was president and Estepa Vasquez was vice president.

The brothers also were accused presenting false documents to county officials midway or at the end of projects to support their fraud.

The jury in February convicted both of wire fraud conspiracy and three counts of wire fraud. The jury also found Estepa guilty of three counts of false statements and Estepa Vasquez of one count of false statement. Estepa was acquitted of witness tampering.

Ungaro in April denied motions for acquittal and a new trial.

In court filings, defense attorneys portrayed Estepa and Estepa Vasquez as family men without prior criminal records. They worked hard, treated their employees with respect, cared for their community — they removed downed trees and branches in Miami's Overtown neighborhood the day after Hurricane Irma — and received letters of support from their staff and community.

Estepa lost his general contractor's license while Estepa Vasquez has had problems pursuing a flower business because of the uncertainty facing him, their attorneys wrote in sentencing memorandums filed in May.

Estepa didn't deny or downplay his conviction, but his attorney, Neil Taylor, sought to put it in context. While Estepa was convicted of shortchanging workers, many of his workers were happy to have a job.

“In today's climate and in particular Miami-Dade County, in return for a steady job and paycheck, many, many people are only too happy to sign on. Is it wrong? Yes. Is it a common practice? Absolutely,” Taylor of the Law Offices of Neil G. Taylor in Coral Gables wrote in the May 3 sentencing memo.

Appeals will dispute the loss calculation of $1.7 million, said Estepa Vasquez's attorney, Susy Ribero-Ayala of Susy Ribero-Ayala Law in Coral Gables.

The attorneys argued the dollar amount shouldn't be based on the company's gain but on the loss to underpaid workers. They said the amount should be based on the gain only if there's no other reasonable way to calculate it.

“It's our position that loss can be reasonably determined” by how much each worker was underpaid, Taylor said.

The government plans to file a restitution motion for $34,000 for the workers, Taylor added.

 

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Conviction for 2 South Floridians Accused of Lowballing Public Housing Bids