Two Contractors to Pay $1.24 Million to Resolve Fraud in Whittier Bridge/I-95 Project

Walsh Construction Co. and Melo’s Rodbusters, Inc. have agreed to pay $1.24 million collectively to resolve False Claims Act allegations that they participated in a fraudulent scheme to take advantage of the federal Disadvantaged Business Enterprise (DBE) program in connection with the federally funded Whittier Bridge/I-95 Improvement Project in Massachusetts.

Walsh, an Illinois corporation, is a general contracting and construction management firm. Melo’s is a Massachusetts corporation and a certified DBE that subcontracted with Walsh on the project to perform furnishing and installation of steel rebar.

The DBE program provides opportunities for businesses owned by socially and economically disadvantaged individuals to work on projects financed by the federal government. The program requires contractors to award, or make good faith efforts to award, a percentage of subcontracts on a given project to DBEs that serve a “commercially useful function.” Companies regularly certify their compliance with the DBE regulations when making claims for payment on federally funded contracts.

According to the U.S. attorney for Massachusetts, in February 2013, the Massachusetts Department of Transportation (MassDOT) selected Walsh, along with its joint venture partner, to be the prime contractor for a federally funded MassDOT project known as the Whittier Bridge/I-95 Improvement Project. Walsh, in turn, subcontracted with DBEs, including Melo’s, for portions of the work. The project was completed in 2018.

As part of the settlement agreement, Walsh admitted that it assisted with certain work functions for Melo’s, and for another DBE on the project that is not a party to the settlement, including assistance in the selection of suppliers and participation in price discussion and negotiation.

As part of its own settlement agreement, Melo’s admitted that Walsh performed these functions even though they should have been performed by Melo’s. Melo’s also admitted to providing inaccurate information in response to a MassDOT inquiry regarding Melo’s price negotiation with suppliers.

According to prosecutors, Melo’s has agreed to pay $146,102 and Walsh has agreed to pay $1,099,000.

Topics Fraud Contractors Numbers