Local Construction Company Settles Allegations Of Fraud Involving A Disadvantaged Business Enterprise
Civil Constructors, LLC, has agreed to pay the United States $400,000.00 to settle False Claims Act allegations, announced David Rivera, United States Attorney for the Middle District of Tennessee. The settlement resolves an investigation of the corporation’s predecessor entity, Civil Constructors, Inc. (“CCI”), for submitting false claims for payment to the United States in connection with the United States Department of Transportation’s Disadvantaged Business Enterprise (“DBE”) Program.
The DBE Program provides a vehicle for increasing the participation by Minority Business Enterprises in state and local transportation projects and ensures that DBEs can compete fairly for federally funded transportation-related work.
“Enforcement of the False Claims Act is a top priority of the Department of Justice and this office,” said U.S. Attorney David Rivera. “This enforcement effort includes investigating schemes to exploit federal programs aimed to help small and minority businesses to compete in the federal marketplace. The U.S. Attorney’s Office will continue to devote the resources necessary to vigorously protect taxpayers’ interests and aggressively pursue fraud, waste, and abuse.”
The United States alleged that CCI, as the prime contractor on a federally-funded construction project on South Water Street in Gallatin, Tenn., agreed that it would use a DBE to perform subcontracted work on the project. That DBE, Columbia Construction, did not possess the necessary resources to perform the actual work. The subcontracted work was, instead, performed by a company that was not qualified as a DBE. CCI used Columbia Construction as a “pass through” entity on the project, a role in which it did not perform a commercially useful function.
“Disadvantaged Business Enterprise fraud like that perpetrated by Civil Constructors harms both the integrity of the DBE program and law-abiding DBE contractors trying to compete on a level playing field for contracts,” said Marlies Gonzalez, regional Special Agent-in-Charge of the U.S. Department of Transportation Office of Inspector General. “Working with our Federal, State, and local law enforcement and prosecutorial partners, our agents will vigorously pursue those who violate the law, and expose and shut down fraud schemes that adversely affect public trust and DOT-assisted programs.”
This matter was investigated by the DOT-Office of Inspector General and the United States Attorney’s Office for the Middle District of Tennessee. The United States was represented by Assistant U.S. Attorney Christopher C. Sabis.