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Minnesota Transit Constructors, Inc. Agree to Pay $4.6 Million To Resolve False Claims Act Liability

On August 24, 2011, a $4.6 million False Claims Act Civil Settlement Agreement was executed between the Department of Justice Civil Division and the U.S. Attorney's Office for the District of Minnesota, and the Minnesota Transit Constructors, Inc. (MnTC), a joint venture comprised of Granite Construction, C.S. McCrossan, Inc. and Parson Transportation Group, Inc. as well as a number of subcontractors. 

The Hiawatha Light Rail System, linking Minneapolis-St. Paul, MN, Airport and the Mall of America was funded by the U.S. Department of Transportation, Federal Transit Administration (FTA) and designed and built by MnTC.  Because the project was a U.S. DOT funded project, MnTC was required to comply with Disadvantaged Business Enterprise (DBE) requirements and any DBE firms must perform a commercially useful function (e.g., use its own resources and workforce to perform its subcontracted work).  The United States contends that between June 2000 and July 2005 MnTC claimed that materials and services for the project were provided by legitimate DBEs (Summit Electric, B&L Electrical Supply, L&S Contracting and Lanier Steel) when in fact they were provided by non-DBEs.  The legitimate DBEs were merely used as extra participants or "pass-throughs" to make it appear as if a DBE had performed the work. 

This investigation was worked with the Department of Justice and the Civil Division for the US Attorney's Office in the District of Minnesota, along with the FTA.