Court Orders Circle C Construction, Llc To Pay $762,894 For Violating The False Claims Act

NASHVILLE, Tenn. August 26, 2014 ? U.S. District Judge Kevin H. Sharp ordered Circle C Construction, LLC to pay $762,894.54 to the United States for False Claims Act violations connected with a construction contract at Fort Campbell military base, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.  Circle C is a construction contractor based in Kentucky.

 The United States originally intervened in the lawsuit against Circle C in 2007.  U.S. District Court Judge William J. Haynes entered summary judgment on both liability and damages for the United States in 2010.  Following an appeal, the Sixth Circuit Court of Appeals in 2012 upheld Judge Haynes’ liability decision, finding that Circle C had submitted false payroll certifications to Fort Campbell that falsely claimed that Circle C was paying the required prevailing wages, under the Davis-Bacon Act, to workers on Circle C’s construction contract at Fort Campbell, when Circle C was not actually paying those wages to the workers of its electrical subcontractor, Phase Tech.  The Court of Appeals reversed Judge Haynes’ original damages award in the case and remanded the case for a new trial on damages.

In March 2014, the parties tried the damages issue before Judge Sharp.  On August 22, 2014, Judge Sharp announced his decision awarding $762,894.54 to the United States in the case.  Specifically, Judge Sharp found that government paid Circle C $259,298.18 for the electrical portion of the affected buildings constructed by Circle C.  This amount constituted the United States’ damages in this case, according to Judge Sharp, since “the government would not have paid Circle C for this work if it had known at the time that Circle C was violating the Davis-Bacon Act”. 

Because violators of the False Claims Act are subject to three times the government’s actual damages, Judge Sharp trebled the $259,298.18 figure and awarded a total of $762,894.54 to the government as damages.
“This court decision signals that the United States will continue to pursue federal contractors that defraud the United States,” said U.S. Attorney David Rivera.  “Judgments like this one are important, because they confirm that the government is entitled to get the benefit of its bargain on federal contracts, which includes knowing that those contractors will pay the prevailing local wages to workers on federal projects.”

The investigation of this case was conducted by the Department of Labor- Office of Inspector General, and the Defense Criminal Investigative Service.  The government was represented by Assistant U.S. Attorney Ellen Bowden McIntyre.

The case is docketed as United States ex rel. Brian Wall v. Circle C Construction, LLC, No. 3:07-cv-91 (M.D. Tenn.).