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Big Dig contractor Modern Continental pleads guilty

E-mail|Link|Comments () May 8, 2009 12:44 PM

By Jonathan Saltzman, Globe Staff

Modern Continental Corp., the largest Big Dig contractor, pleaded guilty today to 39 federal charges stemming from overbilling and construction defects on the project, but prosecutors dropped 10 other charges that had alleged the company was to blame for the disastrous 2006 collapse of the ceiling of the Interstate 90 tunnel.

Lawyers for Modern Continental hailed the decision by the US Attorney's Office to drop all charges stemming from the accident that killed motorist Milena Del Valle. They said the collapse occurred because a New York company supplied the wrong epoxy for ceiling panels, not because of poor workmanship by Modern Continental.

"The epoxy didn't work, and Modern Continental had nothing to do with selecting the epoxy," said Michael J. Connolly, a Boston lawyer who represented the company at the brief change-of-plea hearing in US District Court in Boston. "We believe that the US Attorney's Office brought charges that it could not possibly prove."

Prosecutors were not immediately available for comment.

Powers Fasteners Inc., the Brewster, N.Y., epoxy vendor referred to by Connolly, agreed to pay Massachusetts and Boston $16 million in December to resolve criminal charges filed against it by Attorney General Martha Coakley in the fatal ceiling collapse. In exchange, her prosecutors agreed to drop a manslaughter charge against Powers, the only company to face state criminal charges in the disaster.

During today's hearing before District Court Judge Douglas Woodlock, Modern Continental pleaded guilty to one count of making false statements in documents about flaws in a concrete panel in the wall of the Thomas P. O'Neill Jr. Tunnel. Defects in the panel caused the wall to burst open in 2004, allowing 300 gallons of water a minute to gush into the road.

The company pleaded guilty to 38 charges of making false statements and submitting phony time and materials slips on the project. Modern Continental admitted it overbilled the project by about $167,000 over 15 years by claiming pay for workers classified as experienced journeymen, when they were in fact apprentices.

Modern Continental faces criminal fines of up to $500,000 on each of the 39 counts to which it pleaded guilty, or about $20 million, lawyers for the company said.

But Modern Continental's lawyers noted that the company sought the shelter of the US Bankruptcy Court three days after it was criminally charged last June. They said the company has no money to pay fines.

"We believe the government will recover nothing in regard to this conviction," Connolly said