Subcontractor denies claims of fraud during construction of Vegas resort

A subcontractor of the Regent Las Vegas, accused of conspiring with J.A. Jones Construction Co. in an alleged scheme of kickbacks to defraud the hotel-casino, claims the Regent's allegations are "nothing more than red herrings."

The Regent, which filed for Chapter 11 bankruptcy protection on Nov. 21, alleged Victor DuBois, a manager of Performance Contracting Inc. of Anaheim, Calif., and Eric Brehm, a J.A. Jones' project manager, conspired to fabricate change orders to bill the hotel-casino for work that was allegedly never performed and to "reimburse" Performance for "extraordinary entertainment and other expenses" incurred to entertain the two men.

The Regent, which said J.A. Jones and Performance worked together on several projects including the Regent and the Las Vegas Federal Courthouse, alleged Brehm accepted "thousands of dollars worth of travel and entertainment from (J.A. Jones') contractors in exchange for an agreement to approve change orders that were illegitimate."

The Regent cited a letter from DuBois to his supervisor, Ed Caparelli, that allegedly detailed $15,000 out of $28,300 in Super Bowl expenses that Performance allegedly intended to bill to the Regent and the Federal Courthouse projects.

But Brehm, who was deposed on Dec. 6, disputed the charges. He was reported in Performance's court papers to have acknowledged going to the Super Bowl, but denied being present at most of the other events detailed on DuBois' travel and entertainment reports and also denied claims he received a boat, truck or cash.

Performance, in court papers filed Dec. 14, claimed to be "the lone victim of a rogue employee, DuBois," after a former Performance employee, Rebecca Foreman, said in her deposition she believed DuBois was embezzling the money Performance paid on sham invoices, "falsifying travel and entertainment reports whenever he needed cash and (allegedly) manipulated its internal records to hide his embezzlement."

The subcontractor alleged DuBois, who it said was placed on administrative leave in November, may have asserted his rights not to answer under the Fifth Amendment at his Nov. 1 deposition to "protect his own skin."

DuBois could not be reached for comment.

Performance also disputed the Regent's charges that J.A. Jones approved 19 change orders that increased Performance's base contract to more than $5 million from $500,818.

Performance said a large portion of its extra work were repairs for defective work by other subcontractors, for which it says the Regent is not financially responsible. Performance said the extra work had to be approved by Rider-Hunt, an independent firm retained by the Regent to provide post-contract monitoring, Regent architect Paul Steelman and the Regent, to ensure the Regent had a "fair and reasonable deal."

Meanwhile, a federal judge on Dec. 15 approved the Regent's request for a trial date in the case that was scheduled for March 12 to be postponed to Nov. 5.

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