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Pennsylvania Contractor Sentenced in DBE Pass-Through Scheme in Philadelphia

On September 21, 2016, Rajat Verma, Quakertown, Pennsylvania, the president and sole owner of Vertech International (Vertech), was sentenced in Philadelphia to 12 months’ probation and ordered to pay a $10,000 fine for his role in a scheme to defraud DOT’s Disadvantaged Business Enterprise (DBE) Program. Previously, in March 2016, Verma pleaded guilty to conspiracy to commit wire fraud in a scheme involving the DBE program and purported work performed on the federally funded George C. Platt Memorial Bridge Project (Platt Bridge) in Philadelphia. 
 
In April 2011, the Pennsylvania Department of Transportation (PennDOT) awarded an approximately $42.7 million contract to perform structural steel painting and repairs on the Platt Bridge to a joint venture of two companies, neither of which was certified as a DBE. During the bid process in March 2011, the joint venture submitted a commitment to PennDOT that it would subcontract approximately $3.1 million in DBE work to Vertech, a certified DBE, to supply paint materials for the project. 
 
Verma admitted that Vertech had served as a pass-through on the project and did not provide a commercially useful function. Instead, the joint venture allegedly negotiated contracts and ordered materials for the Platt Bridge directly from non-DBE suppliers. Verma’s company served as a front to give the appearance that the joint venture had met DBE requirements. This scheme caused PennDOT to falsely award approximately $1.97 million in DBE credit to the joint venture. Verma admitted that the joint venture paid Vertech a fee to act as a pass-through that amounted to 1.75 percent of the face value of the supply invoices his company processed.
 
This ongoing investigation is being worked jointly with the Department of Labor-OIG and the Federal Bureau of Investigation. The Federal Highway Administration provided substantial assistance.