Two executives at an Indianapolis-based technology firm have been indicted in a federal bribery case that also involves a former cabinet-level Maryland state government official.
Steven Maudlin, 59, of Indianapolis and James Pangallo, 57, of Greenwood were both named in the federal grand jury indictment, which alleges that the men were part of a bribery conspiracy involving information technology contracts with the state of Maryland’s Department of Human Services.
Maudlin is the CEO of The Consultants Consortium Inc., also known as TCC. He, along with Pangallo, TCC's secretary, are principals in the company, which was founded in 1997 and provides technology and consulting services to businesses and government agencies.
Also named in the indictment are Isabel FitzGerald, 47, of Annapolis, Maryland, who held several Maryland state government positions between 2007 and 2014. Between 2013 and 2014, she served as the state of Maryland’s chief information officer. Before that, she held several positions with the Maryland's Human Services department, the state's primary provider of social services.
The fourth person named is Kenneth Coffland, 62, of Riva, Maryland, who had “developed a close personal relationship” with FitzGerald starting around 2010, the indictment says.
The indictment lays out a complicated case involving numerous companies, some of which prosecutors say were created for the purposes of the conspiracy.
In a nutshell: In 2008, the state awarded two multi-year contracts to a company identified in court documents only as Company #1. One of those contracts was a hosting contract worth up to $129 million and the other was an applications contract worth up to $229 million.
Prosecutors allege that FitzGerald and Coffland influenced Company #1 to hire TCC as a subcontractor. In return, Maudlin and Pangallo directed a portion of the money from those subcontracts back to FitzGerald and Coffland.
Specifically, the indictment alleges that FitzGerald influenced Company #1 to issue a $253,000 work order to TCC that contained “no specified work obligations.” FitzGerald threatened to withhold approval of a project worth $27.6 million to Company #1 if the company did not comply, the indictment says.
FitzGerald also used her influence to get Company #1 to execute a six-year, $24 million subcontracting agreement with TCC, and to hire Coffland at an annual salary and bonuses totaling $500,000.
Both Maudlin and Pangallo were indicted on one count of conspiracy and one count of bribery involving an agent of a program receiving federal funds. Additionally, Maudlin was indicted on a charge of making false statements to federal investigators.
All four are scheduled to make an initial court appearance in Baltimore federal court Oct. 6.
Court records do not yet list any attorneys representing the four.
Maudlin and Pangallo did not returned a phone message IBJ left with a TCC employee Thursday morning. But the company did issue a written statement that said, in part:
"We are disappointed by the recent announcement from the U.S. Attorney’s Office in Maryland. The Consultants Consortium has cooperated fully with the U.S. Attorney’s Office. And while we do not have access to all of the information gathered as part of an investigation into a former government official, we believe the two officers in question acted lawfully and ethically at all times. It’s worth noting that these are allegations against two individuals and not against the company. Furthermore, this is merely the first step in the legal process and these individuals are presumed innocent."
Within the past several years, TCC moved its headquarters from leased space in downtown Indianapolis to a property it acquired along the Monon Trail south of Broad Ripple.
In 2015, the Indiana Economic Development Corp. offered TCC up to $1.5 million in conditional tax credits and an additional $50,000 in training grants, based on its $1.3 million headquarters expansion and plan to hire 105 new employees by the end of 2019.
The IEDC said it is looking into the matter.
“While we highly value companies that choose to invest and add jobs in Indiana, the IEDC takes situations like this seriously,” IEDC spokeswoman Holly Gillham said in an email to IBJ. “As part of the IEDC’s compliance process, we are holding the company’s incentive agreements (meaning no credits or grant funds will be issued) while we gather more information about the situation."
Information on the IEDC website shows the 21-year-old company was planning to hire 30 of the expected 105 workers by the end of 2016, bringing total employment to about 132.
Gillham said "TCC is still in the early stages of its EDGE agreement, with the IEDC certifying $102,885 in tax credits to date. ... The company has so far earned $42,500 of its [Skills Enhancement Fund] training grant.”
The firm also reached a property-tax incentive agreement with the city in 2014 when it agreed retain 112 workers and hire 12 more by 2018 at an average wage of $32.66 per hour.
The city said the company would save an estimated $51,944 in property taxes over the six-year abatement period while paying $36,597.
The agreement came after TCC agreed to renovate two buildings on a 3.6-acre property at the northeast corner of Winthrop Avenue and East 52nd Street. The property is bordered by the Monon Trail on the east.