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Tag Archives: DBE fraud

Yet Another False Claims Act Case Involving the DOT’s DBE Program

Posted in Disadvantage Business Enterprises (DBE)

Readers of this blog know that I have been warning that actions brought under the False Claims Act against contractors violating DBE programs have been increasing.  Last week, I wrote about a False Claims Act case brought by a project manager, employed by a third party subcontractor, that resulted in a $2 million award to… Continue Reading

Whistleblowing Project Manger Awarded $2 Million in DBE Fraud Case

Posted in Disadvantage Business Enterprises (DBE)

While criminal prosecutions involving construction company executives violating federal, state, and local disadvantaged business enterprise programs (DBE) rightfully receive most of the attention, of equal or greater concern to contractors should be whistleblower lawsuits brought under the False Claims Act for violations of DBE regulations.  As I talked about in my recent DBE compliance webinar… Continue Reading

Did a DBE Compliance Program Prevent Jail Time?

Posted in Disadvantage Business Enterprises (DBE)

Another week and another case of DBE fraud resulting in significant fines.  This one involves Connecticut construction firm that agree to pay $2.4 million in fines to settle the fraud allegations.  The story follows an all to familiar “pass through” fact pattern:  a construction company obtains transportation contracts, commits to performing work using certain DBE firms,… Continue Reading

No Transportation Work, No Need to Worry About DBE Fraud? Think Again

Posted in Disadvantage Business Enterprises (DBE)

On March 13, 2014, the Department of Justice announced that a the owner of a Chicago based utility contract was sentenced to 17 months in federal prison and ordered to pay over $500,000 in restitution for DBE fraud scheme used to obtain over $5 million in contracts from the City of Chicago. What is important… Continue Reading

The Hidden Dangers of Failing to Follow DBE Rules (Part 2): The False Claims Act

Posted in Disadvantage Business Enterprises (DBE), False Claims Act

Mega-law firm Wilmer Hale recently published a its 2013 False Claims Act Year in Review.  The report is an insightful read for any business dealing with the federal government.  However, two statistics in particular should stand out for the construction industry: False Claims Act suits hitting an all-time high of 753 in 2013, and Government… Continue Reading

The Hidden Dangers of Failing to Follow DBE Rules (Part 1): Bid Challenges

Posted in Disadvantage Business Enterprises (DBE)

Criminal indictment is not the only threat to contractors who fail to follow the Department of Transportation’s Disadvantaged Business Enterprise (DBE) regulations.  While the risk of jail and civil fines is real, it is limited to those contractors that knowingly violate the DBE rules by engaging in a scheme to use the DBE program to… Continue Reading

The DOT’s Disadvantaged Business Enterprise Program: The Huge Cost of Non-Compliance

Posted in Disadvantage Business Enterprises (DBE)

Join us for a webinar on Mar 27, 2014 at 2:00 PM EDT. Register now! https://attendee.gotowebinar.com/register/5788498068269059073 On January 13, 2014, the Department of Justice announced that two former executives of Schuylkill Products, Inc. had each been sentenced to 2 years in federal prison and forced to pay $119 million is restitution because of their role… Continue Reading

Why You Need A DBE Compliance Audit

Posted in Disadvantage Business Enterprises (DBE)

THE RISK IS REAL: On January 13, 2014, the Department of Justice announced that two former executives of Schuylkill Products, Inc. had each been sentenced to 2 years in federal prison and forced to pay $119 million is restitution because of their role in what the FBI called the largest ever fraud involving the Department… Continue Reading

The Two Most Common Types of DBE Fraud

Posted in Disadvantage Business Enterprises (DBE)

Yesterday, the Wall Street Journal reported that stepped up scrutiny by regulators is at that the top of general counsels’ list of legal concerns in 2014.  In recent years, construction companies have felt this stepped up pressure, particularly if they deal with the Department of Transportation’s Disadvantaged Business Enterprise regulations.  In recent years, Federal and State… Continue Reading

A Reminder Not to Commit DBE Fraud

Posted in Disadvantage Business Enterprises (DBE), Public Bidding, Public Contracts

As has been discussed on this blog, the most common form of fraud involving the Department of Transportation’s disadvantaged business enterprise program, involves a “pass through” entity that performs little or no actual work on the construction project.  Under this common scheme, a general contractor hires a subcontractor that has been certified a DBE and… Continue Reading

What Happens When You Do Not Follow DBE Rules?

Posted in Disadvantage Business Enterprises (DBE), Public Contracts

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… Continue Reading

Contractors Settling DBE Fraud Cases Are Not Out of the Woods Yet

Posted in Public Contracts

Chris McCabe at Papubliccontracts.com has a post up about a two City of Philadelphia contractors, who reached settlement agreements with the City of Philadelphia related to alleged inaccurate invoices. Essentially, the City of Philadelphia claimed that Aramark, a food services contractor, overstated the percentage of its overall contract being performed by a certified MBE.  Aramark… Continue Reading

Another Guilty Plea in a DBE Case

Posted in Contracts, Public Contracts

If you have not gotten the point by now that you should take DBE regulations serious, you should.  The DOT Inspector General posted these two item on its web page today: “On September 11, 2012, Michael Paletta, president of Crossboro Construction Contracting, pled guilty in United States District Court, New York, New York, to a… Continue Reading

More DBE Fraud News

Posted in Public Contracts

A story in Oregon’s Daily Journal of Commerce states that the FHWA announced that an investigation revealed that three highway contractors – Bud Construction LLC, Emery and Sons Inc., and Salt and Pepper Construction Co. – “contrived a relationship” to meet DBE program requirements for a $35 million Oregon DOT project completed in February. According… Continue Reading

The Growing Prosecutorial Interest in DBE Fraud

Posted in Public Contracts

Yesterday, I “attended” an American Bar Association webinar on “Minority Contracting Programs: A Growing Criminal Risk to Corporations.”   The message was clear – federal prosecutions of DBE fraud are on the rise. Indeed, federal prosecution of DBE fraud has occurred in recent years in the following states:  Florida, Illinois, Kansas, Massachusetts, Minnesota, New York, Ohio,… Continue Reading