On March 6, 2019, the U.S. Attorney’s Office, Southern District of New York (SDNY), filed a civil complaint against Ahern Painting Contractors, Inc. (Ahern), Spectrum Painting Corp. (Spectrum), and Tower Maintenance Corp. (Tower) for violating the False Claims Act. The complaint alleges that from 2010 to 2015, the defendants defrauded the United States of more than $150 million by fraudulently representing they were in compliance with Disadvantaged Business Enterprise (DBE) regulations while working on two federally funded New York City (NYC) construction projects. The Federal Highway Administration (FHWA) funded the Brooklyn Bridge rehabilitation project, via the NYC Department of Transportation (DOT), and the Federal Transit Administration funded the Queens Plaza painting project, which was managed by the New York State Metropolitan Transportation Authority and NYC Transit.
According to the civil complaint, painting subcontractor Ahern hired Tower to execute more than $12 million of steel painting work on the Brooklyn Bridge and Queens Plaza projects. They allegedly falsely represented that Tower, a DBE lacking in expertise and resources, would execute the work alone and with its own forces, when they knew that Spectrum, a non-DBE, had done the work. Spectrum also allegedly gave Ahern personnel kickbacks in the form of cash and paid vacations in return for the work it was given.
Note: Indictments, informations, and complaints are only accusations by the Government. All defendants are presumed innocent unless and until proven guilty.