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Investigations

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New York Construction Firm Agrees to Pay $3 Million to Settle Allegations of Fraud

On May 12, 2014, the U.S. District Court, New York, New York, approved a civil settlement agreement whereby Moretrench American Corporation (Moretrench), a Yonkers, New York, based construction company, agreed to pay $3,050,000 to settle civil false claims charges related to Disadvantaged, Minority Owned, and Women Owned Business Enterprise (D/M/WBE) fraud perpetrated on a Federal Transit Administration (FTA) funded Port Authority of New York & New Jersey (PANY&NJ) construction project at the World Trade Center hub train station (the "HUB Project"). 

Between approximately 2007 and 2009, Moretrench fraudulently used Environmental Energy Associates (EEA), a certified D/M/WBE, as a "pass-through" business on a subcontract worth approximately $1.1 Million for dewatering (i.e. groundwater removal) at the HUB Project. The subcontract value equated to a 17 percent D/M/WBE participation requirement. In reality, Moretrench hired the pump operators, supervised the job site, and assembled payroll records. In turn, EEA retained an approximate 10 percent mark-up on each invoice for the use of its minority business status.

The FTA has provided $2.2 billion in grant monies for the reconstruction of the HUB Project.

We investigated this case with the PANY&NJ-Office of Inspector General (OIG). As part of this settlement, Moretrench agreed to pay $50,000 to the PANY&NJ-OIG for investigative costs.