Investigations

 
November 19, 2010

Two Michigan Construction Firms Agree to Pay $1.4 Million to Resolve Alleged False Claims

 
 

Summary

On November 19, 2010, a civil settlement agreement was entered in U.S. District Court, Detroit, Michigan, on behalf of the U.S. Department of Transportation (DOT) with John Carlo, Inc. (JCI), prime contractor on a Federal Aviation Administration (FAA) funded runway project and Angelo Iafrate Construction Company (AICC), subcontractor to JCI.  JCI and AICC agreed to pay more than $1.4 million to resolve alleged false claims related to the reconstruction of a runway and taxiway project at the Detroit Wayne County International Airport.

It is alleged that JCI and AICC submitted false claims and statements claiming that BN&M Trucking, a Disadvantaged Business Enterprise (DBE), performed substantial work on the DOT funded airport runway project contracts when, in fact, the trucking firm did not and was merely a pass-through used to show the appearance of DBE participation.  The DBE regulations required that JCI and AICC commit to subcontracting with DBEs and that the DBEs perform a "Commercially Useful Function".

In addition to the $1.4 million payment to resolve civil claims, AICC has also entered into a separate administrative agreement with DOT to ensure future compliance with DBE requirements.

This investigation was coordinated with the FAA and the Wayne County Airport Authority, who first brought the case to the government's attention.

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