August 30, 2018
FHWA Debars Contractor and Owner in Connection With $2 Million DBE Fraud on Philadelphia Bridge
On August 30, 2018, the Federal Highway Administration (FHWA) debarred Vertech International (Vertech), Quakertown, Pennsylvania, and its owner, Rajat Verma, for 30 months. The debarment stems from Verma’s involvement in a $2 million scheme to defraud DOT’s Disadvantaged Business Enterprise (DBE) program on the federally funded George C. Platt Memorial Bridge Project (Platt Bridge) in Philadelphia. In March 2016, Verma pleaded guilty in U.S. District Court, Philadelphia, to conspiracy to commit wire fraud related to Vertech’s purported DBE work on the bridge. In September 2016, Verma was sentenced to 12 months’ probation and a $10,000 fine for his role in the scheme.
In April 2011, the Pennsylvania Department of Transportation (PennDOT) awarded a $42.7 million contract to a joint venture to perform structural steel painting and repairs on the Platt Bridge. Neither of the two companies in the joint venture were certified DBEs. During the bidding process, the joint venture submitted a $3.1 million DBE subcontract commitment to supply paint materials for the project.
Verma admitted that the joint venture paid Vertech to serve as a pass-through and that his company did not provide a commercially useful function on the project. Instead, the joint venture negotiated contracts and ordered materials for the Platt Bridge directly from non-DBE suppliers. This scheme caused PennDOT to falsely award approximately $1.97 million in DBE credit to the joint venture.
DOT-OIG worked on this investigation with the Department of Labor (DOL) OIG and the Federal Bureau of Investigation (FBI). FHWA and PennDOT 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 out whether a company is currently excluded.