Investigations

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Big Dig Subcontractor Charged with Conspiracy to Submit $30,000 in False Claims

On November 21, 2008, Island Lath & Plaster, Inc. (Island), Calverton, NY, was charged with conspiracy to make false statements and false claims on a Federal highway project–– the Central Artery/Tunnel Project (CA/T Project). Island’s false statements were connected to DBE fraud and the fireproofing work it performed for McCourt Construction (McCourt) on the CA/T Project’s $230 million mainline tunnel finishes contract. After Island prepared its bid, McCourt informed Island that the subcontract work for fireproofing should be performed by a Disadvantage Business Enterprise (DBE) in order to meet its goals under the FHWA DBE program. Island subsequently had Adams Management Group, Inc. (Adams), a certified DBE with offices in both Framingham, Massachusetts and Valley Stream, NY; use an exact photocopy of its initial bid to McCourt. Adams was ultimately awarded the subcontract, but the actual work was performed, managed, and controlled by Island.

In addition, Island was charged for conspiracy to commit false claims for preparing billing documents (on behalf of Adams) that improperly billed apprentice level workers at higher journeyman rates. These billings were submitted to McCourt who billed the CA/T Project. The investigation disclosed that McCourt’s activities caused a government loss of $300,000, while those activities of Island caused an approximate loss of $30,000. The case was prosecuted by the US Attorney’s Office in Boston and investigated by the DOT/OIG with assistance from the FBI and the Department of Labor–OIG.