Investigations

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New York Painting Contractor Suspended by FHWA for DBE Fraud and Agrees To Pay $650,000

On August 4, 2016, Woodside, NY-based Ahern Painting Contractors, Inc. (Ahern) was suspended from Federal contracts and grants, pending debarment proceedings. This suspension action applies government-wide and was taken by FHWA as a result of a civil settlement agreement reached between Ahern and the U.S. Attorney’s Office on March 31, 2016. On that date, Ahern agreed to pay $656,000 to settle claims that in 2007 and 2008 it had engaged in Disadvantaged Business Enterprise (DBE) fraud on two FHWA-funded New York State DOT projects. 
 
The projects involved were a $22.8 million project for the maintenance, repair, and painting of bridges on the Grand Central Parkway and a $2.08 million project for pavement repairs on various highways in the towns of Southampton, Oyster Bay, and Brookhaven, NY. In each case, Ahern utilized a now-defunct DBE, American Indian Builders (AIB), as a pass-through materials supplier. The actual supplier, however, was a non-DBE. Ahern used marked-up invoices and passed money through AIB to make the arrangement appear legitimate.
 
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. The settlement is a compromise of disputed claims and is neither an admission of wrongdoing by Ahern nor a concession by the Federal Government that its contentions were not well founded.