Flathead Valley developer Alvin “Mick” Ruis and two other men face federal charges of major fraud, conspiracy to commit wire fraud and criminal forfeiture from a case involving scaffolding contracts with the U.S. Navy in 2020 and 2021.

Ruis and his co-defendants pleaded not guilty to the charges, were released on their own recognizance and vigorously deny the charges.

Ruis is represented by attorneys Jan Ronis and Gretchen von Helms.

“Mr. Ruis has pleaded not guilty and is presumed innocent,” Von Helms said Monday. “Mr. Ruis has no prior record and has spent his whole life following the rules in order to build successful businesses.”

According to a grand jury indictment that was unsealed Sept. 3 in the Southern District of California, Ruis, Isaiah Levi Diehl of Helena and Shawn Peilun Huang of San Diego allegedly conspired to secure contracts for scaffolding with the U.S. Navy. In the indictment, federal prosecutors claim that the three secured scaffolding contracts through one company, owned by Huang, when the actual work would be done by either Diehl’s or Ruis’ company.

The Naval’s Regional Maintenance centers in San Diego, and Mayport, Florida, both utilized small business set aside contracts called commercial and industrial service contracts.

On March 17, 2020, the San Diego maintenance center released a contract for scaffolding, but contractors had to be “small businesses” under solicitation rules. The indefinite quantity contract had a bid ceiling of $17.614 million.

In July 2021, the Mayport service center released a solicitation for another small business scaffolding contract with a bid ceiling of $7 million.

The indictment alleges that Huang’s company, based in San Diego, called company A in court filings, was awarded the Florida contract and Ruis’ company, called company C in the indictment, based in Montana, was awarded the San Diego service center contract in January 2020.

Ruis, the indictment claims, was the former owner and later consultant with Diehl’s company, called company B in the indictment.

In one alleged scheme, Huang secured the contract as a small business but allegedly would do none of the work — the larger companies would.

“Members of the conspiracy worked together to submit proposals to the U.S. Navy in the name of Company A for (both) contracts knowing company A was not going to perform work on the contracts and that company B or Company C would instead perform the work,” the indictment alleges.

The indictment also alleges the companies intermingled the names of Company A and Company C in submissions related to the 2020 San Diego contract “with the intent to confuse the [San Diego] contracting personnel and to provide an opportunity to switch out company C for company A in the proposal.”

Huang’s company, according to reporting by the San Diego Tribune, was called Vertical Horizon Scaffold, while Ruis’ company was called Vertical Horizon Marine.

The indictment claims that the three men created similar names and logos that were almost identical to conceal the fact that Ruis’ company would do the work for Huang’s.

“Members of the conspiracy switched out [Vertical Horizon Scaffold] for [Vertical Horizon Marine] in a final revised proposal for the 2020 San Diego Southwest Regional Maintenance Center contract, failing to highlight the change as was required, and retaining in the revised proposal work for [Vertical Horizon Scaffold] that was required under the request for proposals and which [Vertical Horizon Marine] did not possess,” the indictment alleged.

Von Helms said the companies each had different federal identification numbers and there was no fraud.

“Anyone who knows how to read numbers should have been able to figure out that Company A was different than C. They clearly have different federal ID numbers,” von Helms said.

The indictment also alleges that the Mayport service center work, while it was awarded to Huang’s company, was always going to be done by Diehl’s company.

“[Diehl’s company] did not qualify as a small business,” the indictment alleged.

The three men have known each other for years.

Von Helms said the case was just days from nearing the end of the statute of limitations when it was filed.

“A disgruntled former employee also bidding on the contracts may have been upset and instigated the investigation,” von Helms alleged.

Diehl’s attorney, Anthony E. Columbo Jr., also questioned the case.

“Mr. Diehl has pleaded not guilty and maintains that he did not conspire to commit fraud. He is presumed innocent, and the government bears the burden of proving otherwise beyond a reasonable doubt,” Columbo said in an email to the Hungry Horse News. “There are important aspects of this indictment that should not be overlooked. Although it accuses three individuals of participating in a conspiracy, many of its allegations simply refer collectively to ‘members of the conspiracy.’ The indictment currently fails to specify precisely what Mr. Diehl himself is alleged to have done.”

He also claimed the government lost nothing under the contracts.

“Just as importantly, the indictment does not allege that the United States — or anyone else — lost a dollar. The contracts at issue were performed and completed without issue. This is not a case where the government claims it paid for work that was never performed or failed to receive the services for which it contracted,” Columbo said. 

“The timing of the indictment also raises serious questions. These allegations concern events from more than five years ago, yet the government waited until just days before the statute of limitations expired to bring charges. When the government waits that long, legitimate questions arise about the availability of evidence, the reliability of witness recollections, and the accuracy of allegations being made years after the events. An indictment is an accusation, not evidence. Mr. Diehl looks forward to defending himself in court, where these allegations will be tested against the actual evidence.”

If convicted, the government is seeking forfeiture “any property, real and personal constituting or derived from proceeds traceable to such offense.”

Ruis is currently building several real estate projects in the Flathead Valley, most notably Teakettle Heights in Columbia Falls, a 420-unit subdivision on a portion of the old Columbia Falls Aluminum Co. Plant.

It’s the largest single subdivision in the city’s history. In addition, he has previously built a hotel in Columbia Falls, restored dilapidated buildings on Nucleus Avenue and built several others, bought and gifted the old high school that is now home to several nonprofits, including the Boys and Girls Club and has completed housing projects in both Kalispell and Whitefish.

Huang’s attorney, David Wilson, declined to comment.