South Carolina lawmakers are considering a law that would block a company from getting state transportation money over its connections to another company.
Lynches River Contracting has obtained more than a dozen contracts in the Carolinas worth millions of dollars. It includes $11.5 million worth of work in Union County, North Carolina. Part of that are stretches of US-74.
A year ago, a Channel 9 investigation found Lynches River Contracting was founded by former Boggs Paving executive Chris Boggs. His brother, Drew, is in federal prison for his role in a massive fraud scheme involving the company illegally obtaining paving contracts.
Several other former Boggs executives pleaded guilty for their roles in the case and departments of transportation in both North and South Carolina banned the paving company from getting state contracts.
While the Boggs Paving case played out in court, Chris and Drew transferred ownership of their other related companies -- Boggs Materials and Boggs Transport -- to trusts for their families.
According to documents filed in a civil court case in 2015, the trusts own 90 percent of Lynches River. Lynches River plans to use the same Boggs Materials and Boggs Transport equipment. Documents also showed the company hired many of Boggs Paving's former employees.
South Carolina state Sen. Greg Gregory, R-Lancaster, started looking into the way Lynches River was formed.
"It seemed egregious and just a sleight-of-hand," Gregory said.
South Carolina's inspector general launched its own investigation.
That investigation found Lynches River's "business operations and components appear to be materially the same" as Boggs Paving, "with the exception of the general ownership shifting from disqualified fathers to irrevocable trusts benefiting their young children."
The Inspector General's Office suggested SCDOT change its regulations to keep this type of practice from happening again.
It went on to say the current way of doing things "undermined the public's confidence in the agency's prequalification system."
Gregory wanted to take it a step further and change the law. He authored a bill to ban companies from bidding on projects in specific situations. Namely, if those companies are connected to trusts that benefit the families of people who aren't eligible to bid.
"I think anybody that looks slightly below the surface can see it's the same company," Gregory said.
Lynches River has already won 17 contracts in South Carolina. If Gregory's bill passes, it's not clear what would happen to those projects.
"I think that's to be determined," he said.
Just as in South Carolina, North Carolina regulations found Lynches River met qualifications. Unlike in South Carolina, an NCDOT spokesperson said there is no known effort to change the rules or laws in the state.
Eyewitness News contacted Lynches River for comment on the story. A press release was faxed to WSOC-TV.
In it, the company said the legislation could put it out of business and cost hundreds of jobs.
It called the bill "unconstitutional" and "unwarranted."
Cox Media Group
