Ohio construction company settles disadvantaged business fraud allegations involving airport paving contract

by Ben Vernia | April 23rd, 2012

On April 23, the Department of Justice announced the settlement, for $500,000, of allegations that an Ohio-based company submitted false claims under an airport contract. According to DOJ’s press release:

Anthony Allega Cement Contractor Inc., a Cleveland construction firm, has agreed to pay the United States $500,000 to resolve allegations that it knowingly submitted false claims related to a federally-funded construction project, the Justice Department announced today. The United States alleged that Allega submitted false claims that made it appear that the company was in compliance with the U.S. Department of Transportation’s (DOT) Disadvantaged Business Enterprise (DBE) program, as required in order to obtain and maintain Allega’s contract with the government. The DBE program provides opportunities to businesses owned by minorities and women, as well as socially and economically disadvantaged individuals, to participate in federally-funded construction and design projects.

Allega was the prime contractor on a project to construct and pave a new runway at Cleveland’s Hopkins International Airport between 2001 and 2006. To obtain and maintain its contract, Allega was required to comply with DOT DBE regulations and to accurately report DBE participation on the project. The United States alleged that Allega claimed that materials and services for the project were provided by a company known as Chem-Ty Environmental, when in fact Chem-Ty was merely a “pass-through” entity used to make it appear as if a DBE had performed the work.

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