General Contractor and Electrical Subcontractor Knowingly Submitted Inflated Pay Estimates for Materials to Build the MBTA’s Orange Line Station
BOSTON – A New Hampshire-based general contractor and one of its subcontractors have agreed to pay more than $420,000 for submitting false and inflated payment requests in connection with their construction of the Assembly Square Station on the Massachusetts Bay Transportation Authority’s (MBTA) Orange Line in Somerville, Attorney General Maura Healey announced today.
S&R Construction Enterprises, its president Stephen Early, subcontractor A&S Electrical LLC and its manager Gregory Lane agreed to resolve allegations that they violated the Massachusetts False Claims Act by knowingly submitting false and inflated pay estimates to improperly front load payments under their contracts. In addition, S&R Construction and A&S Electrical are barred from bidding on and accepting new public contracts in Massachusetts for five years and one year, respectively.
“Building new public transportation infrastructure is how we will move Massachusetts forward, and taxpayers deserve confidence in how we spend every dollar,” said AG Healey. “Overbilling and front-loading creates unacceptable risks of delays and degrades the integrity of our public contracting. Taking on this fraud is a top priority.”
“We are very pleased with this result, and thank the AG's office for its excellent work in pursuing these claims,” said MassDOT/MBTA General Counsel John Englander.
The AG’s Office investigated this matter following a referral by the Inspector General’s Office which received a tip that A&S Electrical requested inflated invoices from one of his subcontractors.
“This is a solid example of how a call to our fraud hotline led to a joint investigation by the AGO and our office resulting in significant recovery for the taxpayers,” said Massachusetts Inspector General Glenn A. Cunha.
The Commonwealth’s complaint alleges that S&R Construction and A&S Electrical violated the Massachusetts False Claims Act by knowingly submitting to the MBTA false and inflated requests for payment reflecting that they had purchased construction materials in greater quantities or at higher prices than they had actually purchased, in order to receive larger payments than they were entitled to at the time under the lump sum contract.
Under the terms of the consent judgments entered Thursday in Suffolk Superior Court, S&R Construction and A&S Electrical admitted there were sufficient facts to support a finding that they submitted inflated requests for payment to the MBTA. The settlements require the defendants to pay more than $420,000 to resolve the allegations, including at least $110,000 in civil penalties.
S&R Construction has also been cited by the AG’s Office for its failure to pay the prevailing wage and failure to submit true and accurate time records on both the construction of the Assembly Square Station and the construction of the Wachusett Commuter Rail Station on the Fitchburg Line. The citations require S&R Construction to pay over $40,000 in restitution to its employees and over $25,000 in penalties.
The false claims matter was handled by Assistant Attorney General Cassandra Arriaza of AG Healey’s False Claims Division and OIG Investigator Ellen Silberman, with assistance from Paralegal Krista Roche, and Kristen Salera and Colleen Frost, both of the AG’s Civil Investigations Division, and with full cooperation from the MBTA.
The prevailing wage matter is being handled by Assistant Attorney General Erik Bennett, with assistance from Investigator Tom Lam, both of AG Healey’s Fair Labor Division.
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