You end up paying $1.15 million to the Justice Department to settle claims that you violated the False Claims Act. As reported by ENR, Caddell Construction of Montgomery, AL, agreed to pay the Justice Department $1.15 million to settle charges that it violated the False Claims Act by — you guessed it — committing DBE fraud. According to the story:
The company agreed to pay $1,150,000 to settle allegations that it violated the False Claims Act by falsely reporting to the Army Corps of Engineers that it hired and mentored a Native American-owned company to work on Fort Bragg and Fort Campbell projects.
As is typical in DBE fraud cases, the Native American firm that Caddell certified as a DBE was merely a “pass through” entity who was performing no commercially useful function.
Perhaps as significant as the fine, is that the charges also led to the indictment of two Caddell Construction executives on federal fraud charges. This story underscores how serious firms must take participation in government DBE programs. Fines are bad, jail time is worse.
Wally Zimolong
Wally represents contractors (and subcontractors) and developers. His clients build and develop residential, commercial, and industrial properties nationwide. Wally enjoys working with the owners of the businesses he represents because they tend to be entrepreneurs and all around interesting people.
