R.I. construction firms pay $1M to resolve false claims allegations

U.S. ATTORNEY for Rhode Island Peter F. Neronha said Rosciti Construction and Wallace Construction, along with four of the companies’ current and former owners and officers, will pay $1 million to resolve civil allegations that they violated the Federal False Claims Act. / COURTESY U.S. ATTORNEY'S OFFICE
U.S. ATTORNEY for Rhode Island Peter F. Neronha said Rosciti Construction and Wallace Construction, along with four of the companies’ current and former owners and officers, will pay $1 million to resolve civil allegations that they violated the Federal False Claims Act. / COURTESY U.S. ATTORNEY'S OFFICE

(Updated 3:49 p.m.)
PROVIDENCE – Rosciti Construction Corp. and Wallace Construction Corp., along with four of the companies’ current and former owners and officers, will pay $1 million to resolve civil allegations that they violated the Federal False Claims Act.
They allegedly violated the act by submitting, or causing submission of, claims for reimbursement for funding earmarked for minority, women-owned, or small business that they were not entitled to receive, U.S. Attorney Peter F. Neronha said Monday.

The federally funded contracts for roadway, water system and parking improvements in communities throughout the state and Rhode Island College were financed by the federal Environmental Protection Agency, U.S. Department of Education and U.S. Department of Transportation.
The contracts contained specific requirements that subcontractors had to include minority-owned, women-owned, or small businesses, also known as “disadvantaged business enterprises.”
The release from Neronha said Johnston-based Rosciti Construction served as the prime contractor for the projects; Providence-based Wallace Construction, a sub-contractor, was purported to be a disadvantaged business enterprise. However, the government alleges that Wallace was not at the time a legitimate “disadvantaged business enterprise.”

Each of the four senior officers and the owners of the two firms is individually contributing to the settlement.

“Disadvantaged business enterprise requirements exist to make sure that small companies owned by women and by minorities have a fair shot to compete for, and benefit from, the economic opportunities provided by federal grants and contract dollars,” Neronha said in prepared remarks. “That opportunity is lost when companies manipulate the process to secure federally funded work in place of those that are legitimately deserving. This office will continue to use all means at our disposal to ensure that contractors who receive federal dollars play by the rules.”
Wallace Construction released a statement about the settlement, saying it is pleased to resolve “all civil administrative matters relating to work it performed as a state and federal certified minority women business enterprise contractor, thereby avoiding lengthy and costly litigation.”
“As a growing state and regional contractor, with a track record of professionalism, quality work and commitment to collaboration, this settlement agreement allows Wallace Construction to focus its energy on forging new relationships and creating new good paying jobs in Rhode Island,” Gregg Perry, a spokesman for Wallace Construction, said.
Rosciti Construction also released a statement, noting its presence in Rhode Island for more than 75 years: “We provide world class construction services throughout North America to both public and private entities. Today’s settlement was an appropriate resolution to a civil administrative matter on a past project. It will help strengthen our firm as we take additional measures to ensure full compliance with all state and federal parameters. Compliance to these rules has and always will be a top priority for the company.”

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