Update: Governor claims Whitehorn bonds are forged
Whitehorn Construction Manager and Project Coordinator Crystal Godinet Ve’ave’a stands firm that their company posted a valid bond of $399,894.25 which was paid to an insurance broker named Raymond Low with Chubb Insurance, the parent company of a group of insurance brokers and agents.
Crystal, wife of company president and owner, Loran Whitehorn, was responding to Samoa News questions during an interview Wednesday evening.
Government officials claim the bond certificate to be fake or bogus, while Governor Lolo Matalasi Moliga in a statement issued after Samoa News broke the story about problems with Whitehorn’s bonds in its Wednesday, May 29th edition, said the bond certificates were forged documents.
The issue on the bond came to light when an official with Chubb contacted the local DPW and AG’s offices, informing them that the agent or broker which Whitehorn Construction Company posted their bond with — in the amount of more than $399,000 — does not work for Chubb, according to a reliable source.
The source further stated that this official from Chubb also noted they have referred this matter to Federal authorities because it’s a scam in the United States, where people indicate they represent the Chubb Group of Insurance Companies when seeking money from companies such as Whitehorn Construction. Samoa News has been unable to verify who the “federal authorities” are exactly — FBI or others.
Crystal showed the Certificate of Bond, wire transfer documents and receipts to Samoa News and the certificate had a government seal, yet she declined to provide Samoa News with a copy. Therefore, Samoa News is unable to independently verify its validity. She pointed out the government should be able to present the media with documents, given they have the documents.
As reported earlier, Chief Procurement Manager Tiaotalaga John Kruse issued a notice on Tuesday, giving Whitehorn 30 business days to come up with a new bond, said a government official who wished not to be named. Samoa News asked Crystal, what action Whitehorn has taken since the notice was issued.
“We will do everything we can to make this work, even if it means forking up a new bond, we will do it… at the same time, we will pursue legal action in the mainland against this broker,” said Crystal.
The Whitehorn manager told Samoa News their company has retained an attorney to deal with these issues.
According to the governor’s legal Counsel, Steve Watson, there are two bonds, each in the contract amount of $7.9 million. He noted that the performance Bond guarantees the project will be completed, and Labor and Materials Payment Bond guarantees all the bills will be paid. The $399+ is 5% of the project value.
“Most Performance and Payment Bond premiums range from 2% - 5% of project value. Both bonds are forgeries,” said the governor’s legal counsel.
In his statement, the governor stated the recent discovery of the performance and payment bonds issued by a mainland insurer on September 12, 2012 and posted by Whitehorn Construction as sureties for completion of the Airport Road project, were forged documents.
“While we regret this unfortunate incident we are pleased to have uncovered the true facts early in the project timeline. The due diligence of the Office of Attorney General in getting to the bottom of the matter is much appreciated,” said the governor in his statement.
Governor Lolo further noted this constitutes material breach of the construction contract, and the Attorney General’s Office, Procurement Office and Department of Public Works are working closely with their Federal partner, the Federal Highway Administration, to ensure the project is managed to a successful conclusion.
The governor further mentioned that Whitehorn was to have been served a notice that the company had 30 business days to cure the default. "If Whitehorn is unable to secure sufficient corporate surety bonds within the time allowed, we will just have to move on," the Governor said.