Investigations

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Pennsylvania Company and Owner Ordered To Pay $45,000 for DBE Fraud

On December 19, 2016, a civil complaint was entered in U.S. District Court, Eastern District of Pennsylvania, against Atrium International, Inc. (Atrium), and its president and owner, Donahue Bailey, under the Federal False Claims Act. The complaint alleges that Atrium, Bailey, and prime contractor Ernest Bock & Sons, Inc. (EBS) participated in a DBE fraud scheme by knowingly submitting false claims for payment on two federally funded Southeastern Pennsylvania Transportation Authority (SEPTA) construction projects. Additionally, on December 21, 2016, U.S. District Judge Thomas N. O’Neill, Jr., approved a Stipulated Order and Consent Judgment against Atrium and Bailey in the amount of $45,000. Atrium and Bailey agreed to the consent judgement, but deny the contentions of the United States and admit no wrongdoing.
 
Previously on July 21, 2016, the U.S. Attorney’s Office and EBS entered into a Civil Settlement Agreement whereby EBS agreed to pay $450,000 to settle claims that it engaged in DBE fraud on two federally funded SEPTA projects. The Government charged that, on both projects, EBS falsely represented that Atrium had performed a commercially useful function and falsely certified that Atrium performed work that qualified for DBE credit. EBS also was charged with knowingly presenting and/or causing to be presented false or fraudulent claims for payment from Federal funds. The settlement agreement is neither an admission of liability by EBS nor a concession by the United States that its claims are not well founded.
 
This case was worked jointly with the Department of Labor’s Office of Labor Racketeering and Fraud Investigations and SEPTA-OIG.