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Prevailing Wage

This archive displays posts tagged as relevant to government contract fraud arising from a failure to pay prevailing wages. You may also be interested in the following pages:

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August 3, 2021

In the largest prevailing wage criminal case in the country, one of the largest contractors to complete projects on behalf of the State of Pennsylvania, Glenn O. Hawbaker, Inc., has agreed to pay more than $20 million in wages stolen from over a thousand of its workers.  Between 2003 and 2018, Hawbaker disguised wage theft on an estimated $1.7 billion in state contracts by artificially inflating costs by millions of dollars annually, and by claiming credits for prohibited costs.  PA AG

The False Claims Act: It Benefits More than Just the Government

Posted  03/5/21
statue of Abraham Lincoln
The False Claims Act, a Civil War-era law, encourages private individuals, such as whistleblowers, to come forward and file suit against unscrupulous government contractors, and share in the government's recovery. The passage of the law was inspired by contractors selling the Union Army bags of sand as flour, lame mules as cavalry horses, and glued-together rags as uniforms. The main purpose of the law is, of...

October 12, 2018

Michael Martin, the owner of a New York-based general contractor called Eastern Building & Restoration, Inc. has plead guilty to a multitude of charges, including fraudulently obtaining public works contracts, withholding over $400,00 in wages from over 50 employees, and stealing over $150,000 each from a minority-owned business and an insurance company. According to the Attorney General, Martin and co-defendant Dr. Scott Henzel, also of Eastern Building and Restoration, took control of two minority-owned businesses in order to fraudulently obtain millions of dollars worth of contracts intended for minority-owned businesses. Furthermore, they underpaid laborers working on public works projects and created false documentation and certifications stating otherwise. Separately, Martin also embezzled over $150,000 from one of the businesses and caused a false insurance claim to be filed on its behalf. He will be sentenced in both Albany and Schenectady counties in early December.  NY AG

June 1, 2018

Richmond, Virginia-based James River Air Conditioning Company agreed to pay $625,000 to settle allegations that it violated prevailing wage requirements, underpaid workers, and submitted false payroll reports to the government related to plumbing, heating, and HVAC work the company performed under seven federal renovation and construction project contracts.  The case was originally filed as a whistleblower complaint under the False Claims Act by Nathan Kirchgessner, who will receive $106,250 from the settlement. USAO EDVA

May 2, 2018

New Jersey construction company Ranco Construction agreed to pay $1.5 million to resolve allegations it violated the False Claims Act by contracting for public construction jobs despite paying its workers a lower hourly wage than required under state and federal law. Specifically, the government claimed that Ranco routinely entered into construction contracts with various state and federal entities and falsely certified to the government that its employees were paid hourly wage rates set under federal and New Jersey prevailing wage laws. The allegations originated in a whistleblower lawsuit filed former Ranco employee Robert Kleinow under the qui tam provisions of the False Claims Act. He will receive of a whistleblower award of more than $150,000 from the proceeds of the government’s recovery. DOJ (NJ)

August 14, 2017

Maryland-based Midasco, LLC agreed to pay $450,000 to settle charges it violated the False Claims Act failing to comply with the Davis-Bacon Act for not paying workers who performed electrical work on the Virginia I-495 HOV/HOT Lanes Project the prevailing wage required by federal labor standards.  The government alleged Midasco instead improperly classified workers as supervisors and paid them a salary in order to avoid paying the higher wages they were entitled to as electricians.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by David Ridley.  He will receive a yet-to-be-determined whistleblower award from the proceeds of the government's recovery.  DOJ (EDVA)

October 4, 2017

Illinois announced a $1 million settlement with A. Lamp Concrete Contractors Inc. (A. Lamp), a construction company based in suburban Schaumburg, for failing to comply with the state’s Prevailing Wage Act. A. Lamp’s state contracts required it to pay workers on public works projects prevailing wages and provide the state with certified payroll records to demonstrate the wages were paid. Madigan alleged that between 2008 and 2014, A. Lamp submitted false payroll records that underreported the number of hours worked by certain workers to create the appearance the company was paying higher wage rates than it was. IL

February 22, 2016

Government contractor Paige Industrial Services, Inc. agreed to pay between $450,000 and $675,000 to resolve allegations it violated the False Claims Act by submitting claims falsely certifying it had complied with the Davis-Bacon Act, which requires the payment of certain prevailing wages and fringe benefits to employees working under a government contract.  The work involved construction and maintenance services at the National Institute of Health campus in Bethesda, Maryland.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act.  The unidentified whistleblower will receive a yet-to-be-determine whistleblower award from the proceeds of the government's recovery.  In a related parallel criminal proceeding, Luis Alonso Valle, owner of the Paige subcontractor construction company Valle Services, LLC., pleaded guilty to an illegal pattern and practice of hiring unauthorized aliens.  DOJ(MD)

Sixth Circuit Adds Further Uncertainty to the Question of Limits on False Claims Act Damages

Posted  02/11/16
By Hamsa Mahendranathan Violators of the False Claims Act can be subject to significant damages: the Act provides treble damages and civil penalties of between $5,500 and $11,000 for each false claim.  But in some cases, the correct measure of damages can be a murky subject. This is especially true when considering whether the damages should account for any value the government received on the contract.  Last...