The owner of two South St. Paul trucking companies on Friday pleaded guilty to getting around a state-ordered settlement by defrauding his drivers.

Marlon Danner, 66, of Inver Grove Heights, who operates Danner Inc. and Bull Dog Leasing Inc., admitted misleading the truck drivers into returning to him money they received as part of an agreement between him and the Minnesota Department of Transportation. On Friday, he pleaded guilty in federal court to one count of wire fraud.

Danner told the drivers that the settlement was a mistake and asked the drivers to send the money back to him. He then masked the repayments by giving his drivers false receipts showing that they had paid for fuel or repairs, investigators say. As a result, he illegally recouped approximately $120,000 of the $185,000 settlement he paid his drivers.

Danner's companies supply trucks and drivers to road construction projects throughout Minnesota. In 2008 and 2009, independent drivers working through Danner's companies worked on the Hwy. 120/Century Avenue reconstruction project, federal officials say. The project was partially funded with federal money and, as a result, Danner was required to pay a mandated truck rental rate to the drivers he hired.

Authorities determined that Danner had been paying his drivers less than the mandated rate. In February 2010, the Minnesota Department of Transportation reached a settlement with Danner in which he agreed to pay more than $185,000 to about 27 truck drivers.

He sent checks for the drivers to MnDOT, and MnDOT then mailed the checks to the drivers on March 2.

On Feb. 27, 2010, investigators say, Danner called many of the drivers and told them that MnDOT had made a mistake and that they should return the checks to him when they arrived in the mail.

By June 3, 2010, investigators say, Danner had received most of the settlement money. He did not tell state officials about the repayments. FBI agents raided Danner's home and businesses in June 2010. He was not arrested.

When contacted at his business Friday, Danner declined to comment. He will be sentenced at a later date. He faces a maximum of 20 years in prison.

James Walsh • 612-673-7428