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New York Painting Contractor Settles DBE Fraud Allegations

On July 12, 2021, Spectrum Painting Corp. (Spectrum), entered into a civil settlement agreement with the U.S. Attorney’s Office for the Southern District of New York. Spectrum agreed to pay $400,000 to resolve allegations of fraud connected to contracted painting work on the Federal Highway Administration–funded Brooklyn Bridge Rehabilitation Project and the Federal Transit Administration–funded Queens Plaza subway station painting project for the New York Metropolitan Transportation Authority (MTA). Both projects included Federal Disadvantaged Business Enterprise (DBE) participation goals. Spectrum, a non-DBE, acknowledged in the agreement that it performed significant portions of work that should have been performed by the subcontractor, Tower Maintenance Corp. (Tower), a certified DBE. Spectrum further acknowledged that it received 50 percent of all profits from the Tower painting work on both projects and did not disclose the nature of its relationship with Tower to the prime contractor or project agencies.
DOT-OIG conducted this investigation with MTA-OIG with assistance from the New York City Department of Investigation.