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FOR IMMEDIATE RELEASE
Wednesday, August 24, 2011
Minnesota Transit Constructors to Pay U.S. $4.6 Million to Resolve False Claims Act Liability
Joint Venture Allegedly Submitted False Claims Related to Transit Project to Link Downtown Minneapolis-St. Paul to Mall of America

WASHINGTON - Minnesota Transit Constructors Inc. (MnTC), a joint venture comprised of Granite Construction, C.S. McCrossan Inc. and Parsons Transportation Group, as well as a number of subcontractors, have agreed to pay the United States $4.6 million to resolve allegations that they knowingly submitted false claims related to a federally-funded transit construction project in Minneapolis, the Justice Department announced today. The United States alleges that the companies falsely claimed that they had used Disadvantaged Business Enterprises (DBEs) for part of the work on the project when they had not.   The U.S. Department of Transportation’s (DOT) DBE program provides assistance to businesses owned by minorities and women, as well as socially and economically disadvantaged individuals, to participate in federally-funded construction and design projects.

 

MnTC was the prime contractor on the project to design and build the Hiawatha Light Rail Transit System, a light-rail line linking downtown Minneapolis-St. Paul International Airport and the Mall of America. To obtain and maintain their contract, MnTC and its subcontractors were required to comply with the DBE regulations and to accurately report their DBE contracting.   MnTC claimed that materials and services for the project were provided by DBEs, when in fact they were provided by non-DBE subcontractors and the DBEs were merely extra participants 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 Tony West, Assistant Attorney for the Civil Division of the Department of Justice.   “Those who make misrepresentations in order to participate in this program and obtain federal funds take advantage both of the taxpayers and the businesses that the program is designed to assist.”

 

“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 B. Todd Jones, U.S. Attorney for the District of Minnesota. “This resolution helps to correct that injustice in this instance.”

 

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 District of Minnesota, DOT’s Office of Inspector General and the Federal Transit Administration.

 

“Disadvantaged Business Enterprise (DBE) fraud harms the integrity of the DBE program and law-abiding contractors , including many small businesses, by defeating efforts to ensure a level playing field in which all firms can compete fairly for contracts,” said Michelle McVicker, regional Special Agent-in-Charge of the DOT’s Office of Inspector General.  “Our agents and investigators will continue to work with the Secretary of Transportation, the Administrator of Federal Transit and prosecutorial colleagues to expose and shut down DBE fraud schemes that adversely affect public trust and DOT-funded transit programs throughout Minnesota and elsewhere.”

 

“This violation of law is not acceptable and the Federal Transit Administration will remain vigilant in cracking down on unscrupulous behavior wherever it occurs,” said Administrator Peter Rogoff, Federal Transit Administration.   “The spirit and intent of this law is to help level the playing field for small and disadvantaged businesses so they may continue to achieve success while strengthening our economy and our transit systems.”

 

The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $7.5 billion.

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