A federal jury has convicted two Georgia brothers of colluding to inflate the price of concrete that their businesses supplied to numerous government and private construction contracts in Coastal Georgia, according to the Department of Justice.
The Current first revealed allegations of the collusion in 2021 when a whistleblower went on the record about how his manager, Gregory Melton, his younger brother David and the president of a third area concrete company rigged the Savannah regional market by setting prices for bids for projects including Georgia Southern University’s biology building and dining halls in Statesboro, buildings at Fort Stewart in Hinesville, Hunter Army Air Field in Savannah and Savannah-Chatham County schools.
The announcement Friday from the Department of Justice is the fifth criminal conviction in the massive scheme that inflated the cost of a basic building material between 2010 to 2016. Defendants James Pedrick, Timothy Strickland and Strickland’s company, Evans LLC, which is based in Claxton, previously pleaded guilty as a part of the same conspiracy. Pedrick’s former employer, Argos USA LLC, previously entered into a deferred prosecution agreement with the Antitrust Division, admitted to its participation in the conspiracy and agreed to pay a $20 million criminal penalty.
The jury convicted the Meltons on Thursday of one count of price-fixing. As of Friday afternoon, however, the jury decision had not been made public. It was unclear what the Meltons potential punishment would be.
The brothers had originally pleaded not guilty. Lawyers for the two Meltons did not immediately respond to requests for comment about the jury decision.
The Justice Department’s Antitrust Division celebrated the court victory in a press release..
“Bid rigging and fraud schemes are serious criminal actions that adversely impact the competitive contracting marketplace,” said Special Agent in Charge Joseph Harris of the Department of Transportation Office of Inspector General (DOT OIG), Southern Region. “Today’s conviction should serve to deter individuals and companies from engaging in deceptive practices that violate federal regulations and the public’s trust.”
Back in 2021, Argos, which is one of the largest concrete companies in the world, admitted that a small number of former employees in Pooler had conspired in the sale of ready-mix concrete “to suppress and eliminate competition by agreeing to fix prices, rig bids, and allocate markets for sales of ready-mix concrete” in the greater Savannah area including Statesboro, and Hilton Head Island, South Carolina.
The collusion by Argos, which has its U.S. headquarters in Alpharetta, amounted to federal crimes and cheated customers and competitors in the Savannah region out of millions of dollars.
The admission set up investigations into other defendants. Those who have pleaded guilty or have been found guilty include:
— Greg Melton, 59,who was division manager for concrete sales for Argos who owned a 200-acre farm in Emanuel County.
— David Melton, 54, who was a general manager for Elite Concrete in Walthourville.
— Timothy Tommy “Bo” Strickland, 45, who was president and co-owner of Evans Concrete in Claxton, a third-generation family business.
— James Pedrick, a 64-year-old former cement salesman for Argos who lived in Savannah.
The whistleblower who brought details of the collusion to federal officials and The Current, Christopher Young, once worked for and with the Meltons and had extensive insider knowledge of the way that Elite Concrete and the local Argos branch operated.
The brothers spoke at least several times per week and compared customers, prices and job bids, Young had alleged. They met restaurants around Chatham County including at Cracker Barrels, Hooters or the Sunshine restaurant and spoke over the phone to exchange pricing information before submitting bids for construction work, he said. That effectively divided Savannah’s concrete jobs between Argos and Elite.
Argos, in its admission to prosecutors, agreed to pay a $20 million fine for wrongdoing. The amount was less than a quarter of the $83 million in business it did in the Savannah and Hilton Head area over a 4½-year period from October 2011, when Argos entered the Savannah market through the acquisition of rival French-based company LaFarge’s assets and taking on its employees, including Melton, Pedrick and Young.