Consortium of construction firms pays $4.6 million to settle False Claims Act allegations in Minnesota

by Ben Vernia | August 24th, 2011

On August 24, the Department of Justice announced that three construction firms paid $4.6 million to settle False Claims Act allegations arising out of a transportation contract in Minneapolis, Minnesota, for which they had jointly contracted. According to DOJ’s press release:

Minnesota Transit Constructors Inc. (MnTC), a joint venture comprised of Granite Construction, C.S. McCrossan Inc. and Parsons Transportation Group, as well as a number of subcontractors, have agreed to pay the United States $4.6 million to resolve allegations that they knowingly submitted false claims related to a federally-funded transit construction project in Minneapolis, the Justice Department announced today. The United States alleges that the companies falsely claimed that they had used Disadvantaged Business Enterprises (DBEs) for part of the work on the project when they had not. The U.S. Department of Transportation’s (DOT) DBE program provides assistance to businesses owned by minorities and women, as well as socially and economically disadvantaged individuals, to participate in federally-funded construction and design projects.

MnTC was the prime contractor on the project to design and build the Hiawatha Light Rail Transit System, a light-rail line linking downtown Minneapolis-St. Paul International Airport and the Mall of America. To obtain and maintain their contract, MnTC and its subcontractors were required to comply with the DBE regulations and to accurately report their DBE contracting. MnTC claimed that materials and services for the project were provided by DBEs, when in fact they were provided by non-DBE subcontractors and the DBEs were merely extra participants used to make it appear as if a DBE had performed the work.

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