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$3 Million Fine for Improper Use of Foreign Materials on Federally Funded Projects

Thursday, January 07, 2016
Sandler, Travis & Rosenberg Trade Report

The Department of Justice announced Jan. 5 that a Wisconsin-based architectural firm has agreed to plead guilty and pay $3 million to resolve criminal and civil liability arising from its improper use of foreign materials on construction projects involving federal funds. This penalty includes a $500,000 criminal fine and $2.5 million to resolve civil allegations under the False Claims Act. The firm has also agreed not to contest its debarment from federally funded projects.

Construction projects funded by the U.S. government are generally subject to laws requiring the use of domestic materials, collectively referred to as “Buy America” requirements. This settlement agreement resolves charges that the company repackaged materials and falsified documents to hide that it was using noncompliant foreign materials for government buildings and transit projects partially paid for with federal funds.

The allegations resolved by the civil settlement were originally brought by a whistleblower under the qui tam provisions of the FCA. This law allows private parties to sue on behalf of the government those who falsely claim federal funds and to receive a share of any funds recovered through the lawsuit, which in this case will amount to approximately $400,000.

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