Former Officer Of Nationwide Fence And Supply Co. Pays $358,707.06 To Settle Alleged False Claims Act Violations Involving Disadvantaged Business Enterprise Requirements In Federally Funded Projects
Alleged Violations Involved Federally Funded Transportation Projects in Kentucky and Indiana
LOUISVILLE, Ky. – Micheal DeMil, a former officer of RMD Holdings, Ltd d/b/a Nationwide Fence and Supply Co. (Nationwide) today paid $358,707.06 to settle allegations that while a project manager, he violated the Disadvantaged Business Enterprise (DBE) requirements in certain federally funded construction projects, announced Acting U.S. Attorney John E. Kuhn, Jr. Today’s payment, in addition to a $1,750,000 payment by Nationwide in December of 2014, settles allegations that the company circumvented the DBE requirements in federally funded construction projects.
“The Disadvantaged Business Enterprise program was created to ensure a level playing field for small, minority-owned and women-owned companies in federally funded transportation projects,” stated Acting U.S. Attorney Kuhn. “By circumventing the law, Mr. DeMil undermined the goal of assisting disadvantaged companies in a market where the federal government invests many millions of dollars.”
The settlement agreement arises from Nationwide’s utilization of a DBE company as a pass through in order to meet the requirements specified in federally funded projects. In particular, the United States contends that during the period from January 6, 2008, through July 16, 2010, then officer and project manager Micheal Demil caused Nationwide to misrepresent how it utilized Sallie’s Wholesale Construction, Inc. This was in violation of federal regulations guiding participation of DBEs in federally funded Department of Transportation Financial Assistance Programs. The projects were in Indiana (where Nationwide installed security fencing at an airport) and in Kentucky (where Nationwide installed high tension cable barriers in Barren, Bullitt, Hart and Jefferson Counties in June of 2008). On both of these projects Michael DeMil acted as project manager.
An earlier settlement agreement with Nationwide covered conduct in 2008, when the Department of Transportation-Office of Inspector General began investigating Nationwide. The federally funded projects were performed between October 20, 2006, through July 16, 2010, in Kentucky, Indiana, Illinois, Georgia and New York and most involved the installation of guardrails, security fencing, and cable barriers along interstates.
At the time, Nationwide was co-owned by two brothers: Micheal DeMil and Robert DeMil. The company was a specialty construction group that conducted business in 33 states with its principal office located in Chesterfield Township, Michigan. Many of the transportation projects on which Nationwide worked were funded in whole or in part by the United States, and each project required a certain percentage of DBE participation. Nationwide was not a certified DBE.
The DBE program generally requires that recipients of federal highway funds establish a program to assist women owned or minority owned businesses to compete for work on federally funded construction projects. Recipients of these funds often accomplish this goal by requiring that each construction project include a certain percentage of participation by a DBE company. This percentage can be met by contractors utilizing DBE subcontractors to either perform work on the project or to supply materials.
Micheal DeMil and Fenton Construction and Excavating, Inc. (where Mr. DeMil is now the majority shareholder, co-director, and Vice President) also have agreed to enter into a three year administrative settlement and compliance agreement with the United States Department of Transportation, Federal Highway Administration (FHWA). This agreement requires DeMil and Fenton to adopt and implement an Ethics Code and Corporate Compliance Program; appoint a Corporate Compliance Officer; and retain an independent Monitor to evaluate the Company's performance of this Agreement and to submit periodic reports directly to the FHWA.
This settlement agreement is neither an admission of liability by Micheal DeMil , nor a concession by the United States that its claims are not well founded.
This case was investigated by the U.S. Attorney’s Offices for the Western District of Kentucky, Northern District of Georgia, Middle District of Georgia, Southern District of Georgia, Southern District of Indiana, and the Central District of Illinois. The matter was prosecuted by Assistant United States Attorney Benjamin S. Schecter in the Western District of Kentucky, Trial Attorney Kelley Hauser with the U.S. Department of Justice, Civil Division, Commercial Litigation Branch, Frauds Section, and was investigated by U.S. Department of Transportation Office of Inspector General (DOT-OIG) and the Federal Highway Administration’s Office of Civil Rights.