A federal judge in Great Falls sentenced Billings contractor Kevin David McGovern on Thursday to two years in prison and ordered him and two of his companies to pay more than $4 million in fines and restitution for convictions in a large corruption case involving federal programs and the Chippewa Cree Tribe.
U.S. District Judge Brian Morris sentenced McGovern to two years in prison on multiple convictions with the terms to run concurrently and to two years of supervised release, court records said. He also ordered McGovern to pay a total of $880,000 restitution. The judge allowed McGovern to report to prison when he is assigned to a facility.
In addition, Morris also ordered McGovern’s former companies, CMG Construction Inc. and MC Equipment Holdings LLC, to pay fines totaling $2.4 million and restitution totaling $1.38 million.
Fines and restitution for McGovern and the companies totaled $4.66 million.
McGovern and three of his former companies were convicted of a total of 13 felonies in four separate indictments involving defrauding the Chippewa Cree Tribe on the Rocky Boy’s Reservation in northcentral Montana and the federal government.
McGovern’s indictments are part of a massive years-long corruption investigation by the Department of Interior’s Office of Inspector General into various tribal activities; the tribe’s Chippewa Cree Construction Company, which was headed by Tony Belcourt; and nontribal persons who did business with the tribe.
Belcourt, a former state legislator, tribal member and business partner of McGovern’s, along with at least 12 other tribal members and non-tribal people have been convicted and sentenced to prison.
Morris earlier sentenced Belcourt, who was a central figure in the probe, to more than seven years and ordered $667,000 restitution.
Morris has presided over all of the corruption cases.
A Great Falls jury convicted McGovern in November 2016 of conspiracy and bribery charges in a kickback scheme on Federal Emergency Management Agency contracts for projects related to flooding on the Rocky Boy’s Reservation in 2010.
McGovern and his former firm, MC Equipment Holdings LLC, pleaded guilty in March to wire fraud and to theft from an Indian tribal organization over a 2012 deal to sell the tribe a portable hot plant, which is used in paving.
He also pleaded guilty on behalf of CMG Construction to false claims against a federally funded project for bills submitted to FEMA for the demolition of the tribe’s flood-damaged medical clinic in 2010.
In a fourth case, MT Waterworks, a Billings pipe-fitting supply and sales firm, paid a $350,000 fine in 2016 after admitting it falsely claimed an Indian preference on federal and tribal contracts, including more than $3.3 million from the Chippewa Cree Tribe for work on a federally-funded water project. McGovern was a partner in the company, along with Belcourt and Kent Boos.
McGovern’s convictions marked a stunning end to a successful career of a Billings contractor and community booster who ran multi-million dollar companies, employed hundreds of people and donated to numerous local charities and organizations.
As McGovern and prosecutors reached plea deals to settle the criminal cases, McGovern also sold GMC Construction and sister companies earlier this year to Oroco Capital, a private equity firm in Bethesda, Md. McGovern formed CMG in 2004 and was president and sole principal of the privately held company.
Sentencing recommendations filed in the case by the prosecution and the defense painted starkly different portraits of McGovern. The parties also disagreed over the amount of prison time and loss amount.
To prosecutors, McGovern was a man who “had everything”, then turned greedy and conspired with Chippewa Cree Tribal officials and others to steal money from the tribe and federal government programs.
McGovern’s attorney, Mark Parker of Billings, said McGovern had a “sterling reputation as an honest, straightforward businessman” and was trying to grow his business. McGovern also was a respected community member who gave generously of his time and money, he said.
McGovern’s conduct was “extremely out of character,” Parker said. “Although he was not the architect of any of these schemes, he was a willing participant. The reasons for that are not clear,” he added.
McGovern has suffered financially and had to sell CMG at “a significant loss,” Parker said.
Assistant U.S. Attorney Ryan Weldon sought a prison sentence of about five years to six years and fines and restitution totaling $4,651,000. Prosecutors agreed not to seek a prison term of more than six years.
“This case is purely about greed,” Weldon said in his sentencing memo.
McGovern had a multi-million dollar business and a personal bank account of almost $1 million. “He had everything,” he said.
CMG Construction did not have to bribe to get business, Weldon continued. The company was a legitimate, thriving firm that employed hundreds of people. Yet, McGovern and his companies “chose” to engage in “the corrupt practices” at the Rocky Boy’s Reservation, he said.
McGovern was “more than willing” to work with Belcourt, who had control over $80 million for various projects, Weldon said.
McGovern’s fraudulent conduct was not a one-time thing; rather, it involved multiple transactions, the prosecutor said. McGovern and others were willing to “shred million-dollar checks, generate false invoices, delete emails and pay bribes,” he said.
“These frauds were not an accident. They were calculated,” Weldon said.
The prosecutor also asked the judge to consider prison sentences he has imposed on 13 others convicted as part of the broader investigation. Those sentences range from a high of about seven years for Belcourt to less than a year for two other defendants. The majority of the 13 defendants were sentenced to about three years or longer.
Parker recommended McGovern serve one year and a day in prison, which would qualify him for good time and shorten his incarceration.
Parker asked the judge to weigh McGovern’s personal characteristics and business performance and reputation.
McGovern did not enter into business with the tribe’s construction company because of “abject greed,” Parker said. And while McGovern and CMG Construction were seeking to grow and profit from the tribal construction contacts, those contracts were a small percentage of CMB’s business, he said.
CMG Construction’s total revenue from 2011 to 2012 was $114.68 million, while contracts with the tribe’s construction company during that time totaled $2.17 million or 1.8 percent of its total revenue, Parker said.
The expectation was that delivering on the contracts would lead to future business with the tribe, Parker said.
And CMG delivered on the contracts, Parker said. “There has been no complaint about the quality of work that CMG performed. The Tribe received quality goods and services under the contracts CMG entered into with the CCCC,” he said.
The business community also viewed McGovern as “someone who strives for fairness and honesty rather than his own profit margin,” Parker said.
Parker submitted letters of support from Billings business representatives who have worked with McGovern, including Eric Bechtold, of RDO Equipment Co., Stephen Langlas of Langlas & Associates general contractors, Charles Yegen of Peter Yegen, Jr., Inc. insurance company, Scott Aspenlieder of Performance Engineering and Consulting and A. Christopher Edwards of Edwards Frickle & Culver law firm.
McGovern, Parker said, worked to improve the Billings community through charitable donations and his time and services. McGovern and his companies treated employees like family, loaning them thousands of dollars to help them buy homes, vehicles and other items, he said.
McGovern’s charitable donations from 2010 to 2015 totaled $185,711, while CMG’s charitable donations totaled $164,683 from 2010 to 2016. The company’s donated services included paving a church parking lot and constructing handicap accessible sidewalk ramps at a school. Another of McGovern’s companies, Johnson Lane Materials, donated a total of $15,046 to numerous organizations from 2010 to 2016.
People who submitted support letters for McGovern’s character and charitable donations included Brian Dennis of the Boys & Girls Clubs; Marc Johnson, men’s pastor at Faith Chapel; Jay S. Harris, president of Yellowstone Bank; Bob Wilmouth, president of Rocky Mountain College; and Kelly Edwards, also of RMC.
“What his background shows is that Kevin McGovern is a good man who acted extremely out of character when he involved himself with Tony Belcourt,” Parker said.