City sues convicted, formerly clout-heavy contractor over fraudulent contracts
BY BRIAN SLOYDSKO Staff Reporter September 6, 2013 11:26PM
Updated: September 7, 2013 9:41PM
The city of Chicago is suing a convicted contractor to recover money that should have been subcontracted to minority-owned companies but was pocketed by the builder instead. Robert Blum could owe significantly more than the $1.4 million city officials claim the two men made by falsifying contract paperwork, according to the suit filed Friday in Cook County circuit court.
Blum owned and operated the now-dissolved Castle Construction Corp., which repeatedly falsified city documents to claim minority or women-owned businesses performed work that they did not do, according to authorities.
Instead, Blum offered the contractors a pittance of what they should have made in exchange for their complicity in the scheme, according to the lawsuit, which says that, in some cases, the subcontractors did a small portion of the work on the projects.
“False representations and claims enabled Castle to bid for and receive lucrative city contracts,” city officials said in the suit.
Neither Blum nor his son Anthony, also named in the suit, could be reached for comment.
A spokesman for the city’s Department of Law declined to comment.
In March 2011, the elder Blum was sentenced to two years of probation but spared a lengthy prison sentence in a plea deal under which Cook County Judge Kevin Sheehan ordered Blum to pay a $20,000 fine. Blum’s Castle Construction Corp. also was fined $20,000.
Blum admitted he didn’t hire minority or women-owned business for $20 million of work that included rehabs of CTA bathrooms and the construction of a fire station. The contracts were awarded by the administration of former Mayor Richard M. Daley.
The city’s lawsuit outlines three additional projects for which it says Castle Construction submitted fraudulent paperwork.
On three contracts for work at O’Hare Airport totaling more than $20 million, two subcontractors signed paperwork indicating they did about $1.5 million in work. But instead of doing the work, Kristy Contreras, who owns Cornerstone Construction Services Inc., and Danton Fielder, owner of D&S Midwest Construction, got a 2 percent cut of that amount by merely offering their signatures, according to the city’s lawsuit, which says Castle largely did the work itself.
Before his fall, the elder Blum had a considerable political clout. In addition to building many of Chicago’s police stations for Mayor Daley’s administration, Blum was a friend of Christopher Kelly, who was a top adviser to and campaign fund-raiser for now-imprisoned former Gov. Rod Blagojevich. Kelly committed suicide in 2009 as he was scheduled to report to prison on a corruption conviction.
In addition to $40,000 fines Blum was ordered to pay when he was convicted, he also was ordered to pay $2.1 million in restitution after he admitted he spent $1.3 million in company money on his palatial home in New Lenox, according to the Internal Revenue Service.
City officials are asking for more than the $1.4 million they accuse Castle of fraudulently collecting and they also are seeking a penalty of up to three times that amount, in addition to other fines and court costs.