Construction firm pays $9 million to settle allegations of fraud in USAID contracts in Egypt

by Ben Vernia | January 6th, 2016

On January 6, the Department of Justice announced that the successor to Washington Group International, URS E&C Holdings, Inc., had agreed to pay $9 million to resolve civil allegations that the company submitted false claims in connection with United States Agency for International Development contracts in Egypt. In 2013, a co-defendant, Contrack International, paid $3.5 million to resolve its liability for the same misconduct. According to DOJ’s press release:

URS E & C Holdings Inc., a successor in interest to the global design and construction company Washington Group International Inc. (WGI), has agreed to pay $9 million to settle allegations that WGI submitted false claims in connection with United States Agency for International Development (USAID) contracts, the Justice Department announced today.

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The settlement concerns USAID-funded contracts for the construction of water and wastewater infrastructure projects in the Arab Republic of Egypt in the 1990s.  The contracts were awarded to a joint venture partnership between WGI, Contrack International Inc. (Contrack) and Misr Sons Development S.A.E. (HAS), an Egyptian company.  The United States filed suit under the False Claims Act and the Foreign Assistance Act, alleging that prior to the award of those contracts, the joint venture partners concealed from USAID that Contrack and HAS were partners in the venture, thus preventing USAID from evaluating their qualifications and eligibility, which was a precondition to contract award.  As a result, WGI and its partners allegedly received USAID-funded contracts for which they were ineligible.  The settlement resolves only WGI’s liability.  The United States previously settled with Contrack and is continuing to pursue its claims against HAS.

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The case does not appear to have been a qui tam (whistleblower) suit under the False Claims Act.


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