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Investigations

Date

Yonkers Contracting Inc. to Pay $2.6 Million to Resolve DBE Contract Fraud Allegations

On November 6, 2015, a civil settlement between Yonkers Contracting, Inc. (Yonkers) and the U.S. Attorney’s Office for the Southern District of New York (USAO-SDNY) was approved in U.S. District Court, Manhattan, New York. Yonkers agreed to pay $2.6 million to resolve alleged False Claims Act violations of federal Disadvantaged Business Enterprise (DBE) regulations.

On November 4, 2015, a civil complaint, detailing the nature of the fraudulent conduct, was filed. Yonkers admitted that it had engaged in fraudulent conduct designed to take advantage of DBE regulations. The fraud was committed in order to secure a $141 million Federal Highway Administration (FHWA) funded New York State – Department of Transportation (NYS-DOT) project known as the I-287/Cross-Westchester Expressway Bridges and Noise Barriers Replacement/Refurbishment Project. Between approximately 2006 and 2010, Yonkers falsely represented that a DBE company, Global Marine Supply Co. ("Global")  performed a commercially useful function when, in fact, it did  not. The value of Global's DBE subcontract was approximately $6.4 million.

Separately, the USAO-SDNY, Criminal Division entered into a Non Prosecution Agreement with Yonkers requiring them to create and maintain internal policy that addresses compliance with DBE programs as well as related training for employees.

A total of $1,295,000 has been earmarked for FHWA from the settlement amount.

We are conducting this investigation with the New York State Metropolitan Transportation Authority-Office of Inspector General (OIG), the Port Authority of NY & NJ-OIG, and the NYS-DOT.