PROVIDENCE, R.I. (WPRI) — A construction bonding company that was recently said to be based in Providence was allegedly “operating illegally” in five states according to an arrest warrant filed in a toxic dumping scandal.

Records show Leo Rush, 77, of Pelham, New Hampshire, has owned a number of performance bonding firms, including Newport Insurance Company that listed Westminster Street as its address on its website.

Contractors are required to buy bonds to cover the cost of a project if something goes wrong, with the insurer accepting the potential multimillion-dollar risk in exchange for a percentage of the total cost of the project.

The bonds protect taxpayers, and state regulators have told Target 12 municipalities are required and expected to check if the bonds are legitimate.

Rush pleaded not guilty to five counts of mail fraud and five counts of wire fraud last month in U.S. District Court in New Hampshire for allegedly selling bogus bonds from 2012 to 2019.

A warrant executed last summer to search Rush’s New Hampshire home alleged he made more than $1 million in one year around 2007 selling “fake bonds” to companies around the country.

The document also stated over the course of about a year, ending last September, Rush deposited approximately $230,000 in sales into his account from “fake surety bonds” sales.

The Target 12 Investigators first reported allegations about Rush’s businesses in July 2017, when Coventry developer John Gauvin came forward with claims about a Rush bond he said was “not worth the paper it was written on.”

Gauvin had hired Julian Development to clear a large piece of land in Plainfield, Connecticut in 2013, but later discovered the bond the contractor presented to the town was written by Rush’s Great Northern Bonding, which was not licensed in Connecticut.

ulian Development co-owner Jason Julian has been arrested in Fairfield in a toxic dumping scandal that also allegedly involved town officials Joseph Michelangelo and Scott Bartlett.

The warrant pointed out “Cease and Desist Orders have been issued in Connecticut, Rhode Island, New Hampshire, Massachusetts and Florida, all barring Rush’s companies from issuing insurance.”

Gauvin has filed a suit against Julian Development for using a fraudulent bond for his project, and he said he is planning to sue the Town of Plainfield for not inspecting the document.

Up until last year, the Newport Insurance website listed the Alice building on Providence’s Westminster Street as its address, but the site now states the company is based in Haiti.

The Rhode Island Department of Business Regulation (DBR) told Target 12 in 2017 state regulators had “often frustrating” contact with Rush as far back as 2007 when the first of several cease and desist orders was issued.

Rush has told Target 12 multiple times his bonds are legitimate and he has done nothing wrong.

Gauvin said his 7-year ordeal has cost him about $500,000 in legal fees, delayed his project by several years and showed how “toothless” cease and desist orders are.

“The biggest thing I discovered was how many municipalities, state and federal agencies did not know how to validate a surety bond,” Gauvin said. “Of they just decided to play Russian Roulette and hope that the project goes smoothly.”

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