Former President of Asphalt Paving Company Pleads Guilty to Bid Rigging

The former president of a Michigan asphalt paving company pleaded guilty Wednesday for his role in a conspiracy to rig bids for asphalt paving services contracts in Michigan.

According to court documents filed in the U.S. District Court for the Eastern District of Michigan, Timothy Baugher, former president of Pontiac-based Asphalt Specialists LLC (ASI), conspired with F. Allied Construction Company Inc. (Allied), and employees from those companies to rig bids in each other’s favor. Baugher participated in the conspiracy from July 2017 through May 2021.

Wednesday’s guilty plea is the 10th in the Antitrust Division’s ongoing investigation into collusion in the Michigan asphalt paving industry. Baugher’s former employer, ASI, and another former ASI executive also pleaded guilty for their participation in the conspiracy with Allied in January 2024. Allied and two of its executives previously pleaded guilty in August 2023 for their participation in the conspiracy. On Aug. 15, 2024, ASI was sentenced to pay a fine of $6,500,000.

Under the terms of the conspiracy, the co-conspirators coordinated each other’s bid prices so that the agreed-upon losing company would submit intentionally non-competitive bids. These bids gave customers the false impression of competition when, in fact, the co-conspirators already had decided among themselves who would win the contracts.

“Americans deserve to pay a fair, competitive price to fix transportation infrastructure,” said Acting Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division. “The division and our law enforcement partners will continue to hold accountable executives who cheat consumers by undermining the competitive process.”

“Fair and open marketplace competition is essential in providing consumers and taxpayers the integrity expected in procuring contracts funded with public dollars” said Special Agent in Charge Anthony Licari of the Department of Transportation’s Office of Inspector General, Midwestern Region. “Corporate executives who collude to fixing prices and rigging bids will be held accountable.”

“Activities related to bid-rigging and collusion do not promote an environment conducive to open competition which harms the consumer,” said Executive Special Agent in Charge Kenneth Cleevely of the U.S. Postal Service Office of Inspector General. “The guilty plea in this case represents a win for all law enforcement agencies who investigate those who engage in this type of harmful conduct to ensure that justice is served."

Baugher pleaded guilty to one count of violating Section 1 of the Sherman Act. He faces a maximum penalty of 10 years in prison and a $1 million criminal fine for the charge. The maximum penalty for corporations is a $100 million criminal fine. The fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine. A sentencing hearing will be scheduled at a later date. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Wednesday’s guilty plea resulted from an ongoing federal antitrust investigation into bid rigging and other anticompetitive conduct in the asphalt paving services industry being conducted by the Antitrust Division’s Chicago Office and the Offices of Inspectors General for the U.S. Department of Transportation and U.S. Postal Service.

Anyone with information in connection with this investigation should contact the Antitrust Division’s Complaint Center at 888-647-3258 or visit www.justice.gov/atr/report-violations.