Blumenthal
HARTFORD, Conn. - Two hearing and air conditioning companies will pay penalties and cooperate with the State of Connecticut's investigation into the industry as a result of a settlement announced Tuesday.
Attorney General Richard Blumenthal settled with B-G Mechanical Services and Link Mechanical Services and says bid-rigging has become prevalent in the industry.
"This industry-wide bid-rigging scheme raised prices and reduced service in air conditioning and hearing for consumers and companies across the state," Blumenthal said. "(B-G President John Haggett) orchestrated the statewide scheme to create the illusion of a competitive market."
B-G Mechanical will pay $70,000 as a penalty to the State, and Link will pay $90,000. The two will cooperate with the State's ongoing litigation.
"In reality, co-conspirators secretly choreographed false bids and cover bids, steering business to benefit themselves, not their consumers," Blumenthal said. "Consumers were robbed of competitive choice and potentially better prices for HVAC services. My office will continue to aggressively pursue additional defendants who participated in the scheme."
Blumenthal alleged that Haggett conceived and implemented the bid-rigging schemes by concocting false bids on competitors' letterhead and then submitting them to customers along with B-G Mechanical's bids.
Another alleged scheme had Haggett requesting his competitors submit bids directly consumers at prices higher than B-G's.
Most of the disputed contracts were year-long Contract Maintenance Agreements, which provide preventative maintenance for a set price.
Blumenthal says the schemes started in at least 1997 and lasted through 2004. Industrial Steel & Boiler Services is still being investigated.
At least 15 bids were rigged, Blumenthal alleges.