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Former Billings highway paving contractor sentenced for attempted scam

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Posted at 8:58 AM, Mar 30, 2023

BILLINGS - The former president of a paving and asphalt contractor based in Billings was sentenced Thursday to three years of probation, with six months of home detention, and fined $27,000 after he admitted to attempting to monopolize the market for highway crack-sealing services in Montana and Wyoming, according to a press release from U.S. Attorney Jesse Laslovich.

Nathan Nephi Zito, 44 of Billings, pleaded guilty in October 2022 to one felony count of attempted monopolization in violation of the Sherman Act.

Federal prosecutors said Zito attempted to cheat the competitive bidding process by monopolizing the markets for highway crack-sealing services in Montana and Wyoming by proposing that his company and its competitor allocate regional markets. As early as January 2020, Zito approached a competitor about a “strategic partnership” and proposed that the competitor stop competing with Zito’s company for highway crack-sealing projects administered by Montana and Wyoming.

In return, Zito’s company would stop competing with the competitor for projects administered by South Dakota and Nebraska. Zito offered to pay his competitor $100,000 as additional compensation for lost business in Montana and Wyoming. Zito further proposed that he and his competitor enter into a sham transaction to disguise their collusion, the press release states.

“If Zito had succeeded in his efforts to game the competitive bidding process, there would have been a dangerous probability he would have eliminated competition and been free to raise prices or limit production, which would have negatively impacted the American taxpayer," Laslovich said in the press release.

“Defendant Zito’s sentence should serve as a deterrent for contractors tempted by greed when bidding on contracts funded with federal dollars,” said Cissy Tubbs, Special Agent-In-Charge, Department of Transportation Office of Inspector General, Western Region. “We rely on DOT operating agencies such as the Federal Highway Administration to sound the alarm when circumstances in these complex bidding processes seem amiss, as occurred here.”