OHIO CONSTRUCTION COMPANY SETTLES ALLEGED FALSE CLAIMS ACT VIOLATIONS

FROM:  U.S. JUSTICE DEPARTMENT
Monday, April 23, 2012
Ohio Construction Firm Agrees to Pay $500,000 to Resolve False Claims Act Allegations Firm Allegedly Submitted False Claims Related to Use of Disadvantaged Business Entities

Anthony Allega Cement Contractor Inc., a Cleveland construction firm, has agreed to pay the United States $500,000 to resolve allegations that it knowingly submitted false claims related to a federally-funded construction project, the Justice Department announced today.  The United States alleged that Allega submitted false claims that made it appear that the company was in compliance with the U.S. Department of Transportation’s (DOT) Disadvantaged Business Enterprise (DBE) program, as required in order to obtain and maintain Allega’s contract with the government.  The DBE program provides opportunities to businesses owned by minorities and women, as well as socially and economically disadvantaged individuals, to participate in federally-funded construction and design projects.
         
Allega was the prime contractor on a project to construct and pave a new runway at Cleveland’s Hopkins International Airport between 2001 and 2006.  To obtain and maintain its contract, Allega was required to comply with DOT DBE regulations and to accurately report DBE participation on the project. The United States alleged that Allega claimed that materials and services for the project were provided by a company known as Chem-Ty Environmental, when in fact Chem-Ty was merely a “pass-through” entity used to make it appear as if a DBE had performed the work.
         
“The Disadvantaged Business Enterprises program helps businesses owned by minorities and women work on federal construction projects,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “Those who falsely claim credits under the program in order to obtain federal funds take advantage both of the taxpayers and the businesses that the program is designed to assist.”

The government’s claims were based upon an investigation conducted by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Northern District of Ohio, DOT’s Office of Inspector General (OIG) and the Federal Aviation Administration.

 “When businesses misrepresent those working with them to obtain government contracts, they violate the law and economically harm subcontractors who already face numerous disadvantages in the workplace,” added Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio. “This resolution helps to correct that injustice in this instance.”      

 “Preventing and detecting DBE fraud are priorities for the Secretary of Transportation and the USDOT-OIG,” said Michelle McVicker, OIG regional Special Agent in Charge. “Prime contractors and subcontractors are cautioned not to engage in fraudulent DBE activity and are encouraged to report any suspected DBE fraud to the USDOT-OIG. Our agents will continue to work with the Secretary of Transportation, the Federal Aviation Administrator, and our law enforcement and prosecutorial colleagues to expose and shut down DBE fraud schemes throughout Ohio and the United States.”

The claims settled by this agreement are allegations only, and there has been no determination of liability.

The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $9.2 billion.