Man Accused Of Defrauding Caltrans Of $1.9 Million Through Ad Scheme
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SACRAMENTO (CBS13) – A Sacramento man was arrested Wednesday for allegedly invoicing Caltrans for print ads his company was supposed to create and run in local newspapers, but never did, Caltrans says.
Eric Blaine Hodgson, 43, owner of Phenix Print & Image in Elk Grove, was hired by Caltrans to create print ads that would advertise new construction contracts to bidders. His company created the invoices, but the ads never ran, a routine Caltrans audit revealed. A subsequent review of Phenix uncovered more evidence of the fraudulent activity, which was handed over to the California Department of Justice, Caltrans says.
“No, no, no, he never did. I know him,” said Kathy Silvers, who rents out an Elk Grove house that belongs to Hodgson.
Two invoices showed contracts for work awarded to Phenix in 2008 and 2009 totaled more than $1.8 million. Caltrans says it awarded a contract to Phenix in 2011 for more than $800,000, but terminated the contract before money changed hands.
“I’m not sure exactly when the fraud began,” Caltrans spokesperson Tamie McGowen said. “The proof of publication that he was providing to us didn’t match up with what was actually running in the newspapers.”
In total, Hodgson defrauded the state of $1.9 million, the department says, which was spent on paying off his mortgage, purchasing toys and comics, and paying for exotic trips for him and his staff. He posted several trip photos on his Facebook page.
“My office’s investigation found that this individual defrauded California taxpayers by failing to do the work he was paid for under his contract with the state,” said Attorney General Kamala D. Harris. “We will aggressively prosecute this case and seek to recover every dollar of the public’s money that was misused.”
Silvers says her son works for Hodgson and that he was going to give her son $4,000 for his birthday and take him on a cruise to the Caribbean.
Hodgson was arrested on 22 counts of grand theft and booked into the Sacramento County Jail.