U.S. Department of Transportation and Ferndale Construction Firm Settle Dispute of False Claims over Minority Owned Subcontractor

            IMCO General Construction (IMCO), a heavy construction company located in Ferndale, Washington, settled claims this week with the U.S. Department of Transportation (USDOT) that it submitted false claims related to its Disadvantaged Business Enterprise (DBE) program.  IMCO denies any wrongdoing in connection with the $200,000 settlement.

            According to the settlement document, the government alleged that while working on the federally-funded Horton Road Project, widening a stretch of Washington State Highway 539 north of Bellingham, IMCO falsely claimed that a DBE completed certain work, when, in fact, the work was done by a non-DBE.  IMCO claimed the work was completed by Aleut, a federally certified DBE company.  In fact the work was completed by BBK Trucking, a company that is not certified as a DBE.

            “Disadvantaged Business Enterprise (DBE) fraud harms the integrity of the DBE program and law-abiding contractors by defeating efforts to ensure a level playing field in which all firms can compete fairly for contracts,” said William Swallow, regional Special Agent-in-Charge of the U.S. Department of Transportation (DOT) Office of Inspector General. “Our agents will continue to work with the Secretary of Transportation and other Federal, State, and local law enforcement and prosecutorial colleagues to expose and shut down DBE fraud schemes that adversely affect public trust and DOT-assisted highway programs.”

            In 1980, the USDOT issued regulations in connection with a program to increase the participation of minority and disadvantaged business enterprises (“DBEs”) in federally funded public construction contracts (the “DBE Program”). Pursuant to those regulations, recipients of United States Department of Transportation (“USDOT”) construction grants are required to establish a DBE program that, among other things, (1) establishes goals for the percentage of a construction project’s work that should be awarded to DBEs (“DBE goals”); and (2) requires general contractors on construction projects to make good faith efforts to meet the relevant DBE goals.

            The case was investigated by the Department of Transportation Office of Inspector General. The case was prosecuted by Assistant United States Attorney Kayla C. Stahman