Earlier this month, the U.S. Attorney’s Office in the District of Connecticut announced a $3.2 million settlement with Ducci Electrical Contractors, Inc. (“Ducci”) to resolve both a criminal and civil investigation into alleged fraud by the company with regards to public construction contracts funded mostly by USDOT money.
Ducci was the prime contractor on the nearly $80 million project, along with another contract over $6.5 million. The project had a Disadvantaged Business Enterprise (DBE) goal of 13 percent. In both projects, Ducci proposed to work with a particular DBE company, thought it knew that the DBE company would not be performing a commercially useful function.
Ducci terminated certain of its own employees, who immediately went to work for the DBE company. For both contracts, Ducci supervised the employees and provided the DBE company with hours worked, provided them with Ducci-owned equipment and got their materials for them. Despite not performing a commercially useful function, Ducci still claimed that the DBE company performed the work to qualify for DBE credit.
Ducci admitted to the government that the DBE company was not performing commercially useful functions on the two projects and that Ducci submitted false statements to the government, thereby depriving other DBE companies of the opportunity for that work.
As part of the settlement agreement, Ducci has agreed to pay over $3.2 million, pls interest, to resolve the False Claims Act allegations, and has entered into a monitoring agreement with the government.
You can read the Department of Justice press release here: https://www.justice.gov/usao-ct/pr/connecticut-electrical-contractor-agrees-pay-32-million-resolve-criminal-and-civil
If your company needs advice regarding use of DBE companies in your projects, please contact Danielle Dietrich at 412-227-0284 or firstname.lastname@example.org.