Highway Contractor Sentenced for Fraud Scheme Related to the Central Artery Tunnel Project in Boston
On March 8, 2016, Modern Continental Corporation (MCC) was sentenced in U.S. District Court, Boston, MA to a term of probation not to exceed 1 year or until the final distribution in the company’s bankruptcy proceeding is completed, whichever is sooner. MCC was also ordered to pay an assessment of $15,600. MCC is in the process of being dissolved in Bankruptcy Court.
Previously, in May 2009, MCC pleaded guilty to 39 counts of false statements related to the Central Artery/Tunnel (CA/T) Project. CA/T, also known as the Big Dig, was a multi-billion dollar highway construction project to build or reconstruct approximately 7.5 miles of highways in Boston, about half of them underground. MCC was in the business of constructing highways, bridges, and tunnels, and was the general contractor on one of the CA/T mainline tunnel contracts.
MCC submitted a false certification on CA/T knowing that the document contained false information with respect to the quality of the work performed on a concrete slurry wall panel in the project tunnel. Additionally, the contract called for MCC to be paid for actual expenses. MCC routinely had apprentice workers perform work, but submitted false and inflated claims for payment for those workers at the higher journeymen rates. MCC actually paid the apprentice workers at apprentice rates and kept the difference.
In March 2010, a sentencing hearing occurred, and the Government and MCC agreed upon a cost of $750,000 for MCC overbilling apprentices at journeyman rates and $1.1 million to repair a CA/T tunnel panel. Regardless of the plea and sentence, no monies were to be turned over to the Government due to MCC being irretrievably insolvent.