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Chicago Construction Company to Pay $12 Million to Settle Contract Fraud Claims by U.S.

On May 1, 2014, McHugh Construction Company, Inc., a Chicago, Illinois, based construction company, agreed to pay the United States and the State of Illinois $12 million to resolve allegations of fraud on government programs designed to benefit women and minority-owned subcontractors under the terms of a civil settlement. The contractor, James McHugh Construction Co., Inc., allegedly failed to abide by Federal and State requirements for the participation of Disadvantaged Business Enterprises (DBE) on seven publicly funded highway and transit contracts between 2004 and 2011. 

In a separate administrative settlement and compliance agreement, James McHugh Construction Co., Inc., agreed to implement a corporate compliance program, appoint a compliance officer, and be subject to an independent monitor for three years. In exchange, Federal, State, and City of Chicago transportation agencies agreed not to bar McHugh from future government contracts. The three-year administrative monitoring settlement and compliance agreement was reached between James McHugh Construction Co., Inc., and the U.S. Department of Transportation, Federal Transit Administration, Federal Highway Administration, the Illinois Department of Transportation, and the City of Chicago.

The settlement is neither an admission of liability by James McHugh Construction Co., Inc., nor a concession by the Federal and State Governments that their contentions are not well founded, and James McHugh Construction Co., Inc., expressly denies the claims.