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Lawsuit: Bridgeview paving company defrauded Target

FILE - In this Nov. 16 2010 file phoshopper enters Target store Atlanta. Target Corp. said Wednesday June 8 2011

FILE - In this Nov. 16, 2010 file photo, a shopper enters a Target store, in Atlanta. Target Corp., said Wednesday, June 8, 2011, it raised its quarterly dividend by 5 cents to 30 cents, a 20 percent increase, as it sought to placate investors after a 22 percent decline in its stock price this year.(AP Photo/David Goldman, file)

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Updated: February 7, 2013 6:40AM



A federal lawsuit filed by the Target Corp. alleges that a Bridgeview-based paving company schemed with other contractors to fix bidding process for its parking lot paving and defraud the national big box retailer of millions of dollars.

Filed in August in the U.S. District Court in Minneapolis, the lawsuit alleges that the paving work that Rose Paving did in Target parking lots in Cicero and Lake Zurich, as well as paving work that other contractors did in Target parking lots nationwide was incomplete and fraudulent.

Total, Target paid Rose Paving about $2.3 million for this work, which it now claims was never completed. Reached in his office on Thursday, Rose Paving chief executive officer and founder Alan Rose credited the suit to a “difference of opinions.”

“Our attorneys are working to submit all the different things we have and that’s our only comment,” Rose said.

LCH Pavement Consultants worked with Rose Paving and four other companies in 2010 to defraud Target through a non-competitive bid scheme, the lawsuit says. As part of the scheme, the businesses worked together to shut out low-cost competitors from the bids, submit high bids for the work, and change the cost of any low bids to inflated amounts.

As such, the contractor that was selected to do the work could charge more than the market price while appearing to be the low bidder, according to the lawsuit.

LCH Pavement Consultants made a deal with Rose Paving and the other contractors to only complete part of the work, but bill Target as if it had been completed, the lawsuit says.

In many cases, the companies concealed the fraud by not removing and replacing the asphalt down to the subgrade — the costliest work in the contracts, the lawsuit says. Instead, they would apply a surface coat of asphalt, which gave the appearance of new pavement.

When the work was completed, the companies fraudulently certified the work had been completed, submitted invoices for the full amount of the work, and collected full pay from Target, according to the lawsuit. In addition, LCH Pavement Consultants demanded and received kickbacks from their contractors and abdicated its project management duties — which Target paid it for — to the contractors.

According to the lawsuit, Target hired LCH Pavement Consultants in 2009 to assess and manage asphalt repair for Target throughout its United States locations. The company has overseen Target projects worth about $100 million.

Rose Paving did the parking lot work in Cicero in September 2010, in Lake Zurich in October 2010 and in Henrietta, N.Y., in December 2010.

Other contractors submitted lower bids than Rose Paving in Cicero and Lake Zurich, but LCH Pavement Consultants altered the bids so it would show that Rose Paving was the low bidder.

The lawsuit says that Rose Paving used two-thirds of the asphalt and other materials required for the project in Cicero, the lawsuit says. Rose Paving also installed less than half of the asphalt and other materials required for the project in Henrietta, N.Y., and performed “far less” of the work Target paid it to do in Lake Zurich.

LCH Pavement Consultants was paid $191,542 for its work with Rose Paving, according to the lawsuit.

Similar schemes with other contractors were carried out in California, Montana, Arizona, Vermont, Pennsylvania, Texas and Georgia, according to the lawsuit.

Attorneys for Target and LCH Pavement Consultants did not respond to multiple messages left Thursday.



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