Sentencing in CalTrans Fraud Case

Attorney General Kamala D. Harris today announced a nine-year state prison sentence of a man who defrauded the California Department of Transportation (CalTrans) out of nearly $1.9 million.

Eric Hodgson, 43, of Elk Grove, agreed to a plea deal that in addition to the nine-year prison sentence, included forfeiture of his personal and real property, which includes two residences, two cars, several retirement accounts and a collection of Stars Wars items worth more than $10,000.

Hodgson was arrested in April on 22 counts of grand theft following a California Department of Justice investigation that began after Caltrans staff discovered fraudulent invoices for print advertisements that had never actually run in local newspapers as promised. On Thursday, Hodgson pleaded guilty in Sacramento Superior Court to seven of the 22 counts as part of the plea deal.

Hodgson, as the owner of Phenix Print & Image, was hired by Caltrans to publicly advertise new construction contracts to bidders, as required by statute. Caltrans employees discovered the alleged fraud during a routine request for information and proof of publication for the construction contract advertisements. A subsequent internal review confirmed likely fraudulent activity and, as consistent with state law, the matter was turned over to the California Department of Justice for further investigation.

The investigation of invoices submitted by Phenix found two print advertising contracts, awarded in 2008 and 2009, that totaled more than $1.8 million. Caltrans terminated a third contract, awarded to Phenix in 2011 for more than $800,000, before any invoices were paid.

The California Department of Justice investigation found that Hodgson defrauded Caltrans of nearly $1.9 million by using false and fraudulent documentation.  He instead used the money to pay off a mortgage, make purchases of toys and comics, and pay for exotic trips for him and his company staff.