CHICAGO (CBS/STMW) — A minority-owned trucking company hired by City Hall to clean and inspect sewers allegedly farmed out the work to a non-minority firm owned in part by Mayor Richard M. Daley’s son and nephew, according to a federal indictment filed Thursday.

Federal prosecutors alleged that businessmen Jesse Brunt and Anthony Duffy schemed to use their company, Brunt Bros. Transfer Inc., as a “pass-through” on a $3 million sewer cleaning and inspection contract with City Hall.

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The mayor’s son, Patrick R. Daley, and nephew, Robert G. Vanecko, were not charged with any wrongdoing. They were former business partners of Duffy.

Duffy was former president of Municipal Sewer Services, in which Daley and Vanecko had a hidden ownership stake, which the Chicago Sun-Times revealed in December 2007. The newspaper’s report led to the investigation by the city inspector general and federal authorities that resulted in the criminal charges.

Brunt Bros. has received more than $3 million since 2000 after being hired to clean and videotape city sewers south of 63rd Street as part of the Southern Third Chicago Sewers Contract, but did not actually perform the work specified, according to a release from the U.S. Attoeny’s office.

Both men and the company face three counts each of mail fraud in the indictment, which seeks forfeiture of $3 million. Brunt, 74, of Chicago; Duffy, 46, of Bartlett; and Brunt Bros. will be arraigned at a later date in U.S. District Court.

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According to the indictment, beginning in 1999, Brunt Bros. fraudulently sought, obtained and maintained certification by the City of Chicago as a minority business enterprise in tsewer cleaning, though the company did not have the capacity to perform the work, the indictment alleges.

In August 2000, Brunt falsely certified to tthe city that Company A would perform a certain value of work for Brunt Bros. under the contract, but substantially under-represented the extent of that work, the indictment alleges.

In a November 2000 letter to the city, he said less than 40 percent of the work would be subcontracted when in actuality, the other firm performed nearly all of the work. Duffy and others then inflated Brunt Bros. invoices to the city by about 15 percent in excess of the amount the other firm charged Brunt Bros., the indictment alleges.

Each count of mail fraud carries a maximum penalty of 20 years in prison and a $250,000 fine. The company faces a maximum of five years probation and a $500,000 fine on each count.

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