Flathead Valley Developer Mick Ruis Pleads Not Guilty to Federal Navy Contract Fraud Charges
A federal grand jury in California alleges Ruis and two others misrepresented company qualifications to win small-business scaffolding contracts
By Maggie Dresser
A Columbia Falls developer pleaded not guilty Sept. 3 to federal charges alleging he conspired to defraud the U.S. Navy and win contracts reserved for small businesses by misrepresenting which companies would perform the work.
A federal grand jury in San Diego indicted Alvin McDonald “Mick” Ruis Jr. and two others on Aug. 21 on one count of conspiracy to commit wire fraud and one count of major fraud against the United States. Prosecutors also seek forfeiture of any proceeds traceable to the alleged conspiracy. The indictment was unsealed Sept. 3, when all three defendants were arraigned in U.S. District Court for the Southern District of California. Each defendant pleaded not guilty and was released on his own recognizance.
Also charged are Isaiah Levi Diehl, of Helena, and Shawn Peilun Huang, of San Diego. A motion hearing is scheduled for Oct. 16 before U.S. District Judge Jinsook Ohta.
Ruis’ attorney, Jan Ronis, said in an email to the Beacon that “an indictment is not evidence but only an accusation, placing upon the Government the enormous responsibility to prove that which has been alleged beyond a reasonable doubt.”
Ruis is the developer behind numerous holdings in downtown Columbia Falls and beyond, including Teakettle Heights, a 421-unit residential project on about 78 acres within the boundary of the former Columbia Falls Aluminum Company Superfund site. The Columbia Falls City Council approved the project in June, and Ruis Construction crews have begun early work. Ruis attended a Sept. 17 tour of the site by Gov. Greg Gianforte and EPA Administrator Lee Zeldin.
The indictment makes no reference to Teakettle Heights or any of Ruis’ Montana projects.
The indictment, which does not name the companies involved, describes a scheme to win two Navy scaffolding contracts set aside for small businesses with recent experience in the work. The contracts were issued by the Navy’s Southwest Regional Maintenance Center in San Diego and Southeast Regional Maintenance Center in Mayport, Fla.
Prosecutors allege Ruis, Diehl and Huang submitted proposals in the name of a San Diego company, identified only as Company A and owned by Huang, knowing it would not perform the work. They allege the work was instead to go to two other companies, B and C, which they knew did not meet the parameters outlined in the Request for Proposals. The indictment says Company B did not qualify as a small business.
Ruis is described as the former owner of and later a consultant with Company B, and as the majority owner of Company C, a Montana corporation formed in April 2020. Diehl is described as Company B’s CEO.
According to the indictment, the defendants worked together to misrepresent Company A and submitted materially false, misleading and inaccurate information via emails throughout each contract proposal process, misrepresenting the name, control and structure of Company A. Using a separate email account within Company A’s domain name, Ruis and Diehl’s association with the processes were hidden. By incorporating Company C under a similar name as Company A, the defendants created nearly identical logos for the two companies, which concealed their intent to have Company C perform the contract in 2020 that was awarded to Company A.
The 2020 contract, with a ceiling of about $17.6 million, was awarded to Company C in January 2021. The indictment says the contract was valued at $1 million or more. Company A was awarded the second contract, with a $7 million ceiling, in September 2021. Prosecutors allege the plan was for Company B to perform that work.
Originally from San Diego, Ruis has been a fixture of the Columbia Falls business community since returning to the area in the 2010s. A 2015 Beacon profile described him as a high school dropout from San Diego County who built a scaffolding and shoring business before investing in downtown Columbia Falls properties and the Cedar Creek Lodge hotel. Ruis told the Beacon he had built his company, American Scaffold, into the largest scaffolding provider to the U.S. Navy.