EagleTribune.com, North Andover, MA

June 22, 2013

Former city IT director charged with fraud

Feds say he got Lawrence contracts for his friends

By Mark E. Vogler

---- — LAWRENCE — While in charge of the city's Information Technology Department, Bryan Cahoon conspired to steal thousands of dollars in federal grants intended to improve local government's technology systems, according to court documents.

The U.S. Attorney's Office has charged Cahoon, 53, of Dover, N.H., with a felony count of theft and fraud concerning programs receiving federal funds in a 17-page information that cited eight unnamed associates as "cooperating" witnesses. An "information'' takes the place of an indictment and is a formal accusation that a person committed a crime.

Cahoon, who worked more than four years for the city's IT Department as an employee and later a consultant, obtained more than $10,000 fraudulently during a period from early 2008 until late 2009, Assistant U.S. Attorney William Bloomer said. During that period, Cahoon "subverted" state bidding laws and caused at least eight contracts with the city totaling $193,460 "to be awarded to his friends and associates," according to the records filed this week in federal court.

The records do not specify the total amount of federal money that Cahoon allegedly obtained through fraud, but the records note his "scheme to steal" targeted federal programs involving hundreds of thousands of dollars.

Neither Cahoon nor Andover attorney James Krasnoo, who is listed as his defense lawyer in the case, could be reached for comment last night.

The alleged fraud, which is the subject of an ongoing FBI investigation, occurred during administration of former Mayor Michael Sullivan.

Cahoon resigned abruptly from his $165,000-a-year consulting job with the city within weeks of Mayor William Lantigua's inauguration on Jan. 4, 2010. Cahoon had made $81,900 a year as director of information services for the city before resigning and returning as a consultant, a move that allowed him to more than double his pay.

Shortly after Lantigua was sworn in as mayor, his administration suspected billing irregularities and questionable practices involving city computers and contractors. Several IT employees were fired as part of a major shakeup of the IT Department.

Essex District Attorney Jonathan Blodgett later impaneled a grand jury to probe whether City Hall employees were involved in an alleged multimillion-dollar overbilling scheme related to city computer contracts. State police seized several computers, but no charges were ever filed.

The court documents filed this week noted that even after Cahoon became a subcontractor to "Company A" in April 2007, he remained the "defacto head" of the city's IT Department until January 2010. He "subverted" state bidding requirements "so that his friends would win several contracts just under $25,000," the U.S. Attorney's Office said.

"Cahoon also hired friends and associates as interns for the IT Department by means of contracts just under $5,000 ... These individuals performed work under their city contracts, while Cahoon, through (his company called Networks@Home, LLC) billed Company A for the same work at an inflated rate," the documents said.

"Company A, in turn, billed (the city) for N@H work, also charging an administrative fee. Effectively, therefore (the city) was double-billed for the same work, and Cahoon did little to no work in return for the funds he (as N@H) obtained from (the city) through Company A," the documents said.

The court records said Cahoon, while doing business as Networks@Home, LLC, subcontracted work on city projects from Company A and used several individuals awarded city IT Department contracts as well as paid interns hired by Cahoon, to perform the subcontracted work. At the same time, they were being paid by the city to perform different work for the IT Department, the documents said.

The result was that "Cahoon profited and caused the city to be double billed for the same work,'' the documents said.

Several cooperating witnesses cited in the court documents said they submitted bogus quotations on contracts at Cahoon's request. They said they performed work on the city library and other properties for Cahoon's private company while also being paid under contracts awarded by the city, the documents said.

One cooperating witness was quoted in the documents as telling an FBI agent that Cahoon asked him to sign a proposal after never reviewing the contract or participating in the bidding process.