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FBI raids SR business

RECORDS SEIZED AT SYAR; QUALITY OF GRAVEL MAY BE TARGET; COMPANY ‘BAFFLED’

The Syar Industries Inc. asphalt plant off Todd Road in Santa Rosa, where armed FBI agents seized records and questioned employees early Thursday morning.

JOHN BURGESS / The Press Democrat
Published: Friday, March 30, 2007 at 4:52 a.m.
Last Modified: Friday, March 30, 2007 at 2:47 a.m.

More than a dozen FBI agents on Thursday swept into a dusty asphalt plant in southwest Santa Rosa and seized office records from one of the leading suppliers of the $111 million Highway 101 widening project.

Facts

SYAR INDUSTRIES INC.

What: Major supplier of aggregate and asphalt in Sonoma County
Founded: 1935
Headquarters: Napa
President: Jim Syar
Locations: Operates in seven counties in California
In Sonoma County: Santa Rosa and Healdsburg

In a pre-dawn raid at the Todd Road asphalt plant owned by Syar Industries, armed agents in bulletproof vests seized computer records and interviewed employees about the operations of the facility, people familiar with the incident said.

An FBI representative in San Francisco confirmed a search warrant had been served on Syar Industries at its plant near Standish Avenue but refused to provide details. Court records had been sealed at the request of the U.S. Attorney's Office in San Francisco, the representative said.

Jim Syar, president of Napa-based Syar Industries, acknowledged the search but said he didn't know what the agents were looking for, what records they seized or when he expected to learn more.

"We don't know what the focus of the investigation is," he said. "We haven't been accused of any wrongdoing, and we don't know of any wrongdoing."

Syar said he was "baffled" by the search because the company doesn't keep many records at the asphalt plant.

He said top company officials have not been interviewed by the FBI, and agents had not conducted a search at the Napa headquarters. He said he had not seen the search warrant or any documentation outlining the probable cause agents used to support their search.

But a person familiar with the raid said agents asked pointed questions about the quality of the aggregate coming into the plant from Syar's Lake Herman mine in Vallejo. That material is mixed with liquid asphalt - sticky, petroleum-based goop - to create the warm, black mush that is spread and compressed to create road surfaces.

The quality - size and strength - of the aggregate directly affects the longevity of the road surface and its price.

The agents seemed interested in whether employees were overstating the quality of the aggregate, the source said.

Syar is one of the largest suppliers of aggregate in the state and operates in seven counties.

The company, founded in 1935 by Jim Syar's father, Tony Syar, is a major supplier of the rock and asphalt used in the Highway 101 widening project from Highway 12 to Bicentennial Way in Santa Rosa. The project is expected to be completed by 2009.

It is unclear whether the investigation has anything to do with the company's contracts to supply aggregate for the Highway 101 work. While that contract is a large one, the Todd Road plant provides asphalt for many road projects in Sonoma County, Syar said.

Gene Petrini, project manager for Ghilotti Construction, said Syar officials assured him there would be no interruption in the supply of materials as a result of Thursday's action.

Ghilotti is one of the two main contractors on the widening project. MCM Construction of North Highlands is building the bridges and other structures, while Ghilotti is constructing the roadways, Petrini said.

Syar is the sole supplier of bedrock and aggregate used to form the base of the road, as well as the asphalt that Ghilotti uses for the road surface. Ghilotti hasn't laid asphalt on the project for several months, but it is planning to do a large section early next week, Petrini said.

Ghilotti has a construction yard adjacent to Syar's Todd Road plant, and several Ghilotti employees reported seeing the FBI activity early Thursday morning, Petrini said.

"They just saw some black cars pull up and guys spilling out and going into the office," he said.

Despite reports that the Todd Road operation had been closed, work and truck traffic at the materials yard appeared to be back to normal by midday.

In addition to the Todd Road plant, Syar operates a gravel mine and asphalt plant on the Russian River in Healdsburg. A supervisor there said they had not been visited by agents.

A federal investigation of Syar would not be the company's first.

In 1993, the Justice Department conducted a price-fixing inquiry into Syar and Kaiser Sand & Gravel Co., another major Sonoma County aggregate outfit.

The outcome of that investigation is unclear, but the companies in 1995 settled a class-action suit that alleged they fixed prices on sand, gravel and asphalt products sold in the county between 1987 and 1993.

The companies admitted no wrongdoing but paid a combined $4.4 million to settle the charges brought by clients who charged that collusion inflated the prices they paid for materials.

This story appeared in print on page 1

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