Two Ohio companies settle disadvantaged business fraud claims for nearly $3 million

by Ben Vernia | June 6th, 2013

On June 6, the Department of Justice announced that two Ohio-based companies, , have agreed to pay $2.88 million to settle a whistleblower’s allegations that they committed fraud in connection with contracts targeted disadvantaged business enterprises (DBEs). According to DOJ’s press release:

The Justice Department announced today that a number of related entities and individuals agreed to pay $2,883,947 to resolve allegations that they falsely claimed disadvantaged business status on a number of federally-funded transportation projects. These entities are Dayton-based TesTech, Inc. and its owner, Sherif Aziz, and Dayton-based CESO Testing Technology, Inc., CESO International, LLC, and CESO, Inc. (collectively CESO), and their owners, David and Shery Oakes.

* * *

The Department of Transportation’s Disadvantaged Business Enterprise (DBE) program encourages the use of woman- and minority-owned businesses on federally-funded transportation projects. Contractors on such projects must make good-faith attempts to meet DBE participation goals as a condition of federal funding.

* * *

The settlement announced today resolves allegations that the defendants claimed DBE status for TesTech, a civil engineering firm, on numerous highway and airport construction projects in Ohio, Indiana, Michigan, and Kentucky. The United States alleged that TesTech was owned and controlled by CESO, a non-DBE firm, and its owners, the Oakes, who falsely claimed that TesTech was owned by Aziz and qualified as a minority-owned business in order to take advantage of the DBE program.

The Department announced that the whistleblower, a former TesTech employee, will receive $562,370 of the settlement (a relator’s share of 19.5%).

Leave a Reply

Recent Posts

Recent Comments