Company agrees to pay more than $315K to resolve allegations of false claims involving U.S. Disadvantaged Business Enterprise program

COLUMBUS, Ohio — A highway construction company based in Summit County, Ohio has agreed to pay the United States $315,252.92 to settle a False Claims Act lawsuit claiming that the company violated the U.S. Department of Transportation’s Disadvantaged Business Enterprise (DBE) program rules that are designed to encourage participation by women- and minority-owned businesses.

The settlement agreement resolves allegations that Karvo Companies filed claims for payment falsely certifying that they were complying with the U.S. Department of Transportation and the Ohio Department of Transportation’s DBE) program requirements, including falsely claiming that their subcontractors were eligible under the DBE requirements and were providing “commercially useful functions” as part of two highway construction projects between 2015 and 2018.

“The payment includes restitution and interest,” said Acting U.S. Attorney Vipal J. Patel, “and the settlement agreement sends a good message to contractors participating in government DBE programs that we will act if they don’t fulfill their end of the contract and follow the rules.”

“The settlement agreement entered into today confirms our steadfast commitment to maintaining the integrity of the U.S. Department of Transportation’s (DOT) Disadvantaged Business Enterprise program,” said Andrea M. Kropf, Special Agent-in-Charge, Midwestern Region, DOT Office of Inspector General.  “Working with our law enforcement and prosecutorial partners, we will continue to protect the taxpayers’ investment in our nation’s infrastructure from actions that undermine DOT-funded programs and projects and the public trust.”

The case was filed under the qui tam provisions of the False Claims Act and was filed on behalf of the United States by a former employee of the company. The former employee will receive a share of the settlement amount.

The settlement is not an admission of liability by Karvo, however, the United States concluded that its claims were well-founded.

Deputy Civil Chief Andrew M. Malek is representing the United States in this case.

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