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City Contractor Sentenced To Probation For Fraud

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CHICAGO (STMW) – A major contractor for the city of Chicago was sentenced to two years probation Tuesday after he admitted he failed to give minority subcontractors their share of business on two projects.

Robert C. Blum, owner of Castle Construction Corp., was originally charged with 10 counts of fraudulently obtaining public money reserved for disadvantaged businesses and one count each of mail fraud and wire fraud.

On Tuesday Blum, of New Lenox, pleaded guilty to two counts of minority business fraud.

Blum was also ordered to pay a $20,000 fine. Cook County Judge Kevin Sheehan also ordered Castle to pay an additional $20,000 by September.

Blum was a close friend of Christopher Kelly, who was a top adviser and campaign fund-raiser to former Gov. Rod Blagojevich before Kelly committed suicide in 2009.

Blum did not speak in court.

Blum had been awarded a $10 million contract by Mayor Daley’s Public Building Commission to build an Edgewater fire station, promising to subcontract the masonry work to a minority-owned company, assistant attorney general Mary Bucaro said.

But he fired the subcontractor and instead gave the work to a white-owned business, Bucaro said.

Castle also shortchanged a minority subcontractor on a $9.8 million project to upgrade three CTA washing facilities for trains and buses in 2006, Bucaro said. Castle told the CTA that it had given a $2.96 million subcontract to Mid-City HVAC, a minority-owned company, but the contract was only for $550,000, the indictment states.

Later in 2007, Castle got the $10 million contract from the Public Building Commission to build a fire station at 6030 N. Clark. Castle said it would subcontract 23 percent of the work to minority-owned companies, including $1.5 million to George Anthony Garth Masonry, a minority-owned business. Instead, Blum hired a white-owned masonry company, LSC Construction, which it then fired after most of the work was done.

Castle submitted records to the commission indicating Garth’s company did the masonry work, Bucaro said.

Blum was also charged in a federal criminal information last year with under-reporting his income by nearly $2.5 million over four years.

Castle and Blum have been permanently barred from getting contracts with the City of Chicago.

–Chicago Sun-Times, via the Sun-Times Media Wire

(Source: Sun-Times Media Wire © Chicago Sun-Times 2011. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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