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Tower Maintenance Corp. Faked Minority Business Deals, Gets Slapped with $150,000 Fine
Audit reveals Long Island-based steel painting company misrepresented compliance with Disadvantaged Business Enterprise rules on two federally funded projects.
Manhattan U.S. Attorney Audrey Strauss announced that the United States has settled civil fraud claims against TOWER MAINTENANCE CORP. (“TOWER”), a Long Island-based steel painting company. The settlement resolves the United States’ allegations that TOWER fraudulently obtained payments on two federally funded construction projects by causing misrepresentations of compliance with Disadvantaged Business Enterprise (“DBE”) rules.
According to the audit, TOWER, a certified DBE, caused the prime contractors on the projects to misrepresent that TOWER, as a DBE, was solely performing work on the two projects, when in fact the work was managed and supervised by codefendant Spectrum Painting Corp. (“Spectrum”), a non-DBE.
Under the settlement approved by U.S. District Judge Analisa Torres, TOWER admits and accepts responsibility for conduct alleged in the Government’s amended complaint and agrees to pay $150,000 to the United States. The settlement amount is based on the Office’s assessment of TOWER’s ability to pay based on the financial information it provided.
Manhattan U.S. Attorney Audrey Strauss said: “With this settlement, my Office paints a clear picture that we will pursue any contractor that participates in an unlawful scheme to exploit the Disadvantaged Business Enterprise program. All contractors are on notice that we are committed to rooting out public works contracting fraud.”
As alleged in the amended complaint filed in Manhattan federal court in August 2019, TOWER performed steel painting work on two federally funded projects to renovate the Brooklyn Bridge and Queens Plaza. Contracts for both projects required Ahern to hire DBEs to perform a percentage of the work and to adhere to the DBE regulations.
The settlement requires TOWER to admit, acknowledge, and accept responsibility for the following conduct:
• In early 2010, TOWER knew that Ahern entered into an agreement with Skanska Koch Inc. (“Skanska”) for industrial painting and rehabilitation work on the Brooklyn Bridge Project.
• In mid-2010, TOWER in fact entered into a subcontract with Ahern to perform painting and blasting work on the Brooklyn Bridge Project, which TOWER expected would be counted toward Ahern’s DBE participation goal for the project.
• In connection with the Brooklyn Bridge Project, TOWER signed and submitted to Ahern various documents stating that the DBE work subcontracted to TOWER would be performed by TOWER alone.
• In mid-2011, TOWER knew that Ahern entered into a contract with the MTA to provide overcoat painting on the elevated structure at the Queens Plaza subway station.
• In 2011, TOWER entered into a subcontract with Ahern to perform painting and blasting work on the Queens Plaza Project.
Key Facts
- State: New York
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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