Posted on March 21, 2018

Chicago Car Wash Operators Charged with Defrauding City in Minority Business Pass-Through Scheme

Samnatha Bomkamp, Chicago Tribune, March 20, 2018

The president and manager of a car wash that was under contract to wash city vehicles have been charged with defrauding Chicago of more than $900,000 by allegedly using suppliers that didn’t comply with the minority business requirements. {snip}

John Balzano, 58, and Natalie Balzano, 55, of J&J Car Wash of Chicago, were each charged Monday with felony theft, theft of government property, wire fraud, mail fraud and fraudulently obtaining money reserved for disadvantaged business enterprises. Natalie Balzano was also charged with two counts of forgery. The charges were announced by Attorney General Lisa Madigan and the city inspector general’s office.

{snip} the Balzanos, who are married, worked with a subcontractor sanctioned by the city’s minority business enterprise rules, Oak Park-based PJ’s Ace Hardware, who then allegedly created fake invoices for car wash products that were sold and delivered by suppliers who were not minority-owned.

John Balzano placed orders directly with those suppliers, the attorney general’s office said, and then PJ’s Ace Hardware allegedly created new invoices, marked up by 15 to 20 percent. Balzano paid those, officials allege, to make it appear that J&J Car Wash was complying with the city’s minority business contract goal to spend at least 16.9 percent of the total contract price with minority-owned businesses.