Post Buckley (PBS&J), the national engineering consultants say they and their clients have suffered about $36m in fraud losses out of the office of their chief financial officer over several years through March 2005. Their president Todd Kenner told us in a telephone interview that the fraud was about 3 percent of billings of something over a billion dollars over several years. He said internal auditors employed by PBS&J and the board of directors' audit committee turned up the wrongdoing in the first months of 2005.

CFO responsible

The theft was traced to then chief financial officer Scott DeLoach and two of his employees in the Miami office. The three were fired, Kenner says, PBS&J clients were notified and the FBI, and US Attorney's office were given details - all in March 2005. Since then the employee owned company has worked with several outside accounting firms including DeLoitte Touche and Price Waterhouse Coopers to nail down details of the fraud. A final report detailing the conclusions is due within a couple of months, Kenner says.

Assets of the three thieves including stock, bank accounts, residences, and other valuables were quickly seized.

"Recovery (of stolen funds) has gone extremely well," Kenner told us. He said the three used "a variety of schemes" to take money over several years. Many of the schemes related to overhead charges. The three have "owned up" to the fraud, he said, and he understands they are in the final stages of negotiating Guilty pleas with the feds.

Kenner could not give us the split between theft of clients and theft of PBS&J but he said the money the firm owes clients is less than the $36m total fraud, because part of the fraud was against the company itself. He said the split will be detailed in the accounting report that is being finalized.

In parallel the company is negotiating restitution to toll authorities, state DOTs, and other clients.

Kenner said most of the firms clients "have been very understanding" because he said, the company discovered the abuse and reported it and because "they recognize we do good work." Also the firm had voluntarily reduced its charges to clients soon after reporting discovery of wrongdoing.

TxDOT suspends PBS&J "until further notice"

The Austin TX American Statesman newspaper reported this morning that PBS&J were told by TxDOT they have been suspended as project management consultants on tollroad jobs in central Texas and other work around the state. A May 23 letter to PBS&J from engineering director Amadeo Saenz told the company they will get no further work authorizations on existing contracts and they will not be considered for any new contracts until further notice.

A PBS&J spokesman told us the report was accurate, except that it failed to make the point that PBS&J and TxDOT are by now very close to reaching a settlement.

4,000 employess in 75 cities

PBS&J have nearly 4,000 employees working out of 75 cities and this year does about $550m in gross revenue. It is employee-owned like WSA and PB.

PBS&J also do extensive work for toll agencies in Florida including Florida's Turnpike and Orlando Orange County Expressway Authority.

PBS&J have been general engineering consultants for the Central Texas Turnpike project of TxDOT which covers TX130, TX45N, and Loop-1 tollroads worth in aggregate some $2.5b and involving some 106km (66mi) of new tollroad in the Austin area. TOLLROADSnews 2006-06-06