Dive Brief:
- Connecticut contractor URS Corp. AES has agreed to pay $580,000 to resolve federal civil claims that it overcharged for labor on an Amtrak Niantic River rail bridge reconstruction project in East Lyme, CT, according to HartfordBusiness.com.
- Prosecutors alleged that URS billed the maximum allowable labor wage rate to Amtrak, even though the company actually paid workers at a lower rate.
- Prosecutors said that in submitting the incorrect wage rates for reimbursement, URS violated the federal False Claims Act. URS assumed the contract after it purchased the original contracting firm, Washington Group International.
Dive Insight:
"This was a significant civil recovery for Amtrak, and one that sends an important message for contractors regarding their obligation to properly bill for services," Amtrak Inspector General Tom Howard said, according to WTNH.
Just into the third month of the year, the construction industry has already seen several fraud cases, most dwarfing the URS case in scope and dollars.
Chicago real estate developer Laurance Freed was convicted this month of several counts of fraud and other related charges amid allegations he and another company executive fraudulently obtained lines of credit and loans, in one case using the same tax-increment financing notes from the city to obtain two different lines of credit totaling $7 million.
In another case, a former U.S. Navy contractor pleaded guilty to falsely certifying to the Navy that he had paid subcontractors more than $1.2 million. In reality, even though he collected payment from the Navy, he didn't pay any subs, according to prosecutors.
And in a major case last month, three Pennsylvania steel executives were sentenced after pleading guilty to wire fraud involving almost $19 million worth of state and federal highway projects obtained under the false pretenses of a disadvantaged business shell company.