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Department of Justice
U.S. Attorney’s Office
District of Rhode Island

FOR IMMEDIATE RELEASE
Monday, December 19, 2016

Construction Companies, Senior Corporate Officers to Pay $1M to Settle False Claims Act Allegations

Rosciti Construction, Wallace Construction, four senior officers improperly sought reimbursement of funding reserved for minority-owned and women-owned businesses

PROVIDENCE – United States Attorney Peter F. Neronha announced today that Rhode Island-based Rosciti Construction Corporation and Wallace Construction Corporation, together with four of the companies’ current and former owners and officers, will pay $1 million dollars to resolve civil allegations that they violated the Federal False Claims Act by submitting, or causing the submission of, claims for reimbursement for funding earmarked for minority, women-owned, or small business that they were not entitled to receive.

The federally funded contracts for roadway, water system, and parking improvements in communities throughout the state and at Rhode Island College were financed by the Environmental Protection Agency, the United States Department of Education, and the United States Department of Transportation. The contracts contained specific requirements that subcontractors on these projects must include minority-owned, women-owned, or small businesses (commonly known as “disadvantaged business enterprises”). Rosciti Construction served as the prime contractor for the projects; Wallace Construction, a sub-contractor on all of the projects hired by Rosciti, was purported to be a disadvantaged business enterprise.  In fact, the government alleges that Wallace was not at the time a legitimate disadvantaged business enterprise, and lacked the capacity to perform necessary work on the projects.

Each of the four senior officers and the owners of the two firms is individually contributing to the settlement.

“Disadvantaged business enterprise requirements exist to make sure that small companies owned by women and by minorities have a fair shot to compete for, and benefit from, the economic opportunities provided by federal grants and contract dollars,” said U.S. Attorney Peter F. Neronha.  “That opportunity is lost when companies manipulate the process to secure federally funded work in place of those that are legitimately deserving. This Office will continue to use all means at our disposal to ensure that contractors who receive federal dollars play by the rules,” said Neronha.

In addition to paying a $1million dollar civil settlement, Rosciti and Wallace have entered into administrative agreements with the Environmental Protection Agency to resolve potential claims that could have resulted in suspension or debarment from participation in federal contracts and programs. Additionally, under the terms of these agreements, Rosciti and Wallace will appointment internal compliance officers and a neutral, third-party external monitor to ensure compliance with disadvantaged business enterprise requirements in the future; conduct training on these issues; and take additional steps to foster and maintain a culture of compliance.  The costs of both the compliance officer and the monitor will be paid for by the companies.

This matter was handled by Assistant U.S. Attorneys Zachary A. Cunha and Richard W. Rose, and was investigated by the United States Environmental Protection Agency, the United States Department of Transportation, the United States Department of Education and the United States Attorney’s Office.

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Contact:

Jim Martin (401) 709-5357

email: USARI.Media@usdoj.gov

on Twitter @USAO_RI

Topic(s): 
Financial Fraud
Labor & Employment
Component(s): 
Press Release Number: 
16-119
Updated December 19, 2016