Monterrey Security Focus of Fraud Investigation for Alleged Billing Discrepancies

October 12, 2017 10:36 AM

Federal authorities have requested to review financial documents Monterrey Security provided to other firms after an audit raised concerns.

On Thursday, members of the State Government Finance Committee will review how Monterrey Security, based in Chicago, was chosen to provide protection at U.S. Bank Stadium.

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"We are cleaning up a mess that could've been avoided if people had done their basic research and due diligence," State Rep. Sarah Anderson, chair of the committee said.

The state established legislation to have the Minnesota Sports Facilities Authorities oversee the design and construction of the stadium.  It hired SMG, a public venue management company to operate the facility day-to-day.  SMG contracted with Monterrey Security in March of 2016 to provide security at events.

RELATED: New Security Companies say They're Ready for Sunday's Game at US Bank Stadium

When concerns were raised over the security provider, a legal firm, Maslon LLP,  was hired to audit the company.

In the report, attorneys determined Monterrey used, "highly questionable billing practices," such as mistaken billing or over billing, potentially rising to the level of fraud or criminal activity.

The probe focused on two summer concerts and the time sheets Monterrey submitted to SMG. 

RELATED: Stadium Security Whistleblower: 'I Had Moral Responsibility' to Speak Up

The report claimed the names of 200 staffers — who had been terminated months before — appeared on invoices.  Plus, another 49 current employees appeared twice, or in one case, three times on the roster.  Some of the employees reportedly worked more than 24 hours in a single day.  Combined, the duplicated and terminated workers made up one-third of the total time entries.

The report said, "there is no way to tell whether the employees actually provided services, so any potential discrepancies could be bigger than the 249 anomalies."

The document said Monterrey responded via email last month that states, "For reasons that Monterrey is still trying to determine, its software appears to have populated the report with the names of several employees who did not work at those events and in fact, no longer work for Monterrey." 

RELATED: Security Company at U.S. Bank Stadium Fired after Investigation

The response also states that, "The number of workers on each invoice was correct, even though the names were inaccurate."  

The report said Monterrey later produced modified rosters for the two concerts, but they still conflict with Monterrey's pay records.

Rep. Anderson confirmed Wednesday that she is aware of a separate fraud investigation. 

She plans to ask about that and more at Thursday's hearing.

"If they were able to do this overbilling, clearly SMG and MSFA weren't doing their job in providing oversight into what this company was doing," Anderson said. "At the end of the day it's the taxpayers who have to foot the bill."

Federal authorities have asked to review Monterrey's documents. SMG ended its contract with Monterrey one year into a three year deal.  . 

 

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Beth McDonough

Copyright 2017 - KSTP-TV, LLC A Hubbard Broadcasting Company

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