Chicago construction executives headed to prison

February 13, 2013

The Associated Press

Two former executives of the defunct Chicago contractor Krahl Construction are headed to prison for overbilling clients for renovation projects and paying kickbacks.

Former company President John Paderta was sentenced to five years. Former Executive Vice President Doug Harner received a four-year sentence.

Federal prosecutors announced the sentences Tuesday.

The two men were each ordered to pay restitution of more than $9 million to Digital Realty Trust of San Francisco and Berwind Property Group.

The former executives pleaded guilty to taking part in a scheme in which fraudulent invoices were used to overbill the companies. Two employees of the client companies are awaiting sentencing for soliciting and accepting kickbacks in return for steering business to Krahl.

Five other former Krahl employees are also awaiting sentencing in the case.