Investigations

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Contractors Agree to Pay $11.75 Million in Michigan DBE Fraud Case

On March 15, Ajax Paving Industries, Inc. and Dan's Excavating, Inc. (DEI), agreed in U.S. District Court in Detroit, Michigan, to pay $11.75 million to resolve False Claims Act and administrative claims that they knowingly violated Disadvantaged Business Enterprise (DBE) contracting requirements for federally funded construction projects at Detroit Metropolitan Wayne County Airport. Operating as a joint venture, Ajax and DEI were the prime contractors for federally-funded road projects at the airport. The joint venture allegedly misrepresented the amount of DBE contracting work performed by Borbolla Construction & Concrete Supply, Inc. The companies claimed that Borbolla Construction performed substantial work on the contracts when Borbolla Construction actually performed little more than minor administrative tasks. In addition to the $11.75 million payment to resolve civil claims, the joint venture has entered into a separate administrative agreement with FAA to ensure future compliance with DBE requirements. FAA agreed not to pursue any suspension or debarment action against the companies and their employees. This case was investigated with the Civil Division of the Justice Department, the U.S. Attorney's Office for the Eastern District of Michigan and FAA.