For more than a year, a suburban road builder was blocked from new contracts by the Illinois Department of Transportation while the government agency investigated whether felon Sebastian “Sam” Palumbo was secretly, and wrongfully, involved in the company’s operations.
That business — known as Builders Companies, composed of several entities including Builders Paving, LLC, Builders Asphalt, LLC, and Builders Concrete, LLC — is now back at work on state road projects, with the IDOT investigation, and an ensuing legal battle in the courts, behind them.
Builders was the apparent low bidder on two dozen IDOT road projects since 2024 totaling more than $50 million, but IDOT wouldn’t formally award the work to the firm, or let crews break ground, until recently.
A settlement reached in late March broke the logjam, and ended a lawsuit brought by Builders against IDOT, even if questions still remain about Palumbo’s potential past role with Builders, whose executives include one of his daughters and her husband.
A spokeswoman for IDOT, which builds and maintains many state roadways and is overseen by Gov. JB Pritzker, said: “Nine of the contracts that Builders were the lowest bidder prior to the lawsuit resolution have been awarded and executed.”
Although there were concerns that costs could rise significantly for the work that had been paused, IDOT’s spokeswoman says there’s been “no change to the bid price.”
At least two of those projects have now begun, including one totaling about $2.6 million on Illinois Route 47 in the Huntley area, stretching about 1.5 miles, and involving pavement patching, resurfacing, and curb and gutter replacement.
The other one, on Busse Road in Bensenville, totals just over $2 million.
The other IDOT contracts Builders has now secured are in or near Bloomingdale, Des Plaines, Lockport, Park Ridge, Riverwoods, Rosemont, Skokie and Sugar Grove, according to IDOT.
Palumbo was once part of a road-building empire, until a racketeering conviction in the late 1990s not only sent him, a brother and their father to prison, but also led to their permanent banishment from IDOT projects.
Federal prosecutors showed that Palumbo ripped off employees, while his former construction companies were found to have ripped off taxpayers by overbilling on road projects.
In 2024, the Chicago Sun-Times discovered ties between Builders and one of Palumbo’s now-former road firms, Orange Crush LLC.
Not only did they share a Hillside construction yard and some administrative functions, but Palumbo’s daughter Kaitlyn Palumbo Gandy was part of an entity called Five Sisters Management, LLC, that was listed on incorporation records as a “manager” of Orange Crush.
Orange Crush was one of the Palumbo businesses that IDOT has said was banned from state work stemming from Palumbo’s long-ago conviction.
IDOT then put a “pause” on new contract awards to Builders to investigate, and Builders later sued to try to force IDOT’s hand in awarding projects, insisting it did nothing wrong or underhanded.
The agency agreed to the March settlement but hasn’t provided detail as to why it was inked, especially given that IDOT ended up finding even deeper connections between Palumbo and Builders.
The settlement agreement revealed there had been a “borrowed employee agreement” in 2019 between Palumbo’s companies, which at the time included Builders Concrete and Orange Crush, and the rest of the Builders Companies.
“Sebastian Palumbo owned and controlled Builders Concrete and Orange Crush as of the date of the agreement, which states that ‘the Builders Companies, and their affiliates, were established pursuant to Sebastian’s intention and plan to transfer his assets, including the assets and operations of the Crush Companies [defined as Orange Crush and Builders Concrete], over time to his children.’”
“Pursuant to the agreement, Builders Asphalt and Builders Paving borrowed employees from Orange Crush and Builders Concrete during the period when Orange Crush and Builders Concrete were owned and controlled by Sebastian Palumbo.”
“The borrowed employee agreement further provides that ‘in no instance’” will Orange Crush “‘provide a Loaned Employee to any of the other Companies for work on any project funded in whole or in part by the Federal Government or the Illinois Department of Transportation.’”
IDOT asserted in the settlement agreement “that the Builders Companies did not fully or accurately disclose their relationship with Sebastian Palumbo in their prequalification applications or their correspondence with IDOT regarding its investigation.”
Even so, “IDOT has concluded that there is insufficient evidence at this time to support the conclusion that the Builders Companies were not responsible bidders under the Illinois Procurement Code.”
The state agency also wrote: “To date, IDOT has been satisfied with the Builders Companies’ performance of past contracts let by IDOT.”
The settlement was reached to “avoid the delay, uncertainty, inconvenience, and expense of further litigation.”