WASHINGTON – The PBSJ Corp. (PBSJ), a design and engineering firm based in Florida, has paid more than $6.4 million to resolve claims that it violated the False Claims Act by submitting false and fraudulent claims to the government, the Justice Department announced.
The settlement arises from a $36 million embezzlement scheme that took place between 1992 and 2005 and was perpetrated by PBSJ’s former Chief Financial Officer and two other employees. The scheme involved shifting funds and fabricating entries in the company’s books and records to cover up the fraud, and resulted in PBSJ’s audited overhead rates being overstated.
The settlement also resolves unrelated issues concerning how PBSJ treated certain indirect costs that also contributed to PBSJ’s audited overhead rates being overstated. The inaccurate overhead rates were submitted to the United States in connection with hundreds of contracts with federal agencies for the purposes of contract qualification, contract negotiation, contract billing, and applicable contract and audit reporting requirements. As a result, PBSJ submitted claims to the United States under federal contracts that were false or fraudulent because the claims relied on and incorporated the overstated overhead rates. More than a dozen federal agencies were affected by the fraud, including the Departments of the Army, Transportation, Interior and Homeland Security.
“Companies that enter into contracts with the government must maintain accounting controls and procedures that ensure that the costs and rates that they submit to the government are accurate,” said Assistant Attorney General Peter D. Keisler of the Civil Division.
Previously, three individuals responsible for the embezzlement, CFO William Scott Deloach, Maria Garcia, and Rosario Licata, pleaded guilty on Sept. 28, 2006 in the Southern District of Florida and currently await sentencing. The criminal investigation of the individuals was conducted by the U.S. Attorney’s Office for the Southern District of Florida and the FBI, Miami Field Division.
The civil investigation of PBSJ was conducted by the Civil Division of the Department of Justice, the Office of Inspector General for the Department of Transportation, and the Defense Contract Audit Agency.