USDOJ: Ohio Construction Firm Agrees to Pay $500,000 to Resolve False Claims Act Allegations

On April 23, 2012, the United States Department of Justice announced that Anthony Allega Cement Contractor, Inc., a Cleveland based construction firm, has agreed to pay $500,000 to the U.S. government to resolve allegations under the False Claims Act.  The investigation was conducted by the Justice Department’s Civil Division, the United States Attorney’s Office for the Northern District of Ohio, DOT’s Office of Inspector General (OIG) and the Federal Aviation Administration.  According to the findings, Allega was hired by the U.S. government to construct and pave a new runway at Cleveland’s Hopkins International Airport between 2001 and 2006. The company allegedly failed to comply with the U.S. Department of Transportation’s (DOT) Disadvantaged Business Enterprise (DBE) program and report its progress.  Allega claimed that materials and services were provided by a company named Chem-Ty Environmental.  However, Chem-Ty was allegedly only used as a facade by Allega to make it appear as if a DBE had performed the work.  Since compliance with the DBE program was required under Allega’s contract with the government, the company’s failure to comply constituted a False Claims Act violation.

The Disadvantaged Business Enterprise DBE program was created to provide opportunities to businesses owned by minorities, women, socially, and economically disadvantaged individuals to participate in federally-funded construction and design projects.   Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division believes that those whom defraud the DBE program are taking advantage both of taxpayers and the businesses that the program is designed to assist.

Michelle McVicker, OIG Regional Special Agent in Charge notes that the Secretary of Transportation and the USDOT-OIG, together with the Federal Aviation Administration, law enforcement, and prosecutors are working to prevent and shut down DBE fraud schemes in Ohio and the United States.

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