Pennsylvania Contractor Suspended by FHWA for Role in DBE Fraud Scheme
On March 31, 2016, FHWA suspended and proposed the debarment of Rajat Verma and Vertech International, Inc. based on a February 2016 OIG referral. At that time, the U.S. Attorney’s Office in Philadelphia filed an information charging Rajat Verma with conspiracy to commit wire fraud in a scheme involving DOT’s Disadvantaged Business Enterprise (DBE) Program and work performed on the federally funded George C. Platt Memorial Bridge Project (Platt Bridge). Verma is the president and sole owner of Vertech, a corporation that is currently certified as a DBE.
Verma pleaded guilty in February 2016 and admitted that Vertech served as a pass-through and did not provide a commercially useful function. The joint venture allegedly negotiated contracts and ordered materials for the Platt Bridge directly with suppliers that were not DBEs, and without the involvement of Vertech. Verma's company served as a front to give the appearance that the joint venture met the DBE requirements on the Platt Bridge project. This scheme caused PennDOT to falsely award approximately $1.97M in DBE credit to the joint venture. Verma admitted that the joint venture paid Vertech a fee of 1.75 percent of the face value of the supply invoices processed by Vertech to act as a pass-through.
DOT-OIG is jointly working this ongoing investigation with DOL-OIG and the FBI. FHWA has provided substantial assistance.
Note: Exclusion actions (suspensions and debarments) are frequently for a specific period of time and the System for Award Management (sam.gov) should be consulted to find whether a company is currently excluded.