Sherman-Dixie Concrete Industries Inc. to Pay $664,000 to Settle False Claims Act Allegations

SHERMAN—Dixie Concrete Industries Inc. has agreed to pay the United States $664,581.23 to settle False Claims Act allegations, announced David Rivera, Acting United States Attorney for the Middle District of Tennessee.

The settlement resolves allegations that Sherman-Dixie submitted false claims for payment to the United States for products that did not meet required specifications. These products included concrete end walls and catch basins that are typically used in and adjacent to roadway construction.

The United States alleged that Sherman-Dixie submitted these claims after repeatedly certifying that its products were in reasonable compliance and were produced pursuant to applicable procedures. The investigation found, however, that many of the products did not meet specifications as they related to the strength and placement of rebar within the pre-cast products. Although Sherman-Dixie provided these products for projects primarily administered by the Tennessee Department of Transportation, a substantial portion of the funding for these projects was provided by the United States through the Federal Highway Administration, an agency within the U.S. Department of Transportation (DOT).

“Enforcement of the False Claims Act remains a top priority of the Department of Justice and this office,” said Acting U.S. Attorney David Rivera. “This enforcement effort extends to all attempts to procure funds from the United States and its agencies by false pretenses. The U.S. Attorney’s Office for the Middle District of Tennessee will continue to devote the resources necessary to vigorously protect taxpayers’ interests and aggressively pursue fraud, waste, and abuse.”

“The settlement announced today sends a strong message to those that would seek to substitute inferior products in transportation-related projects,” said DOT-OIG Regional Special Agent in Charge Marlies Gonzalez. “We will leave no stone unturned to ensure the safety of the nation’s transportation system. DOT-OIG remains committed to working with our law enforcement and prosecutorial colleagues and other federal and state partners to prevent and detect waste, fraud, and abuse.”

The federal investigation corroborated conduct originally discovered by the Tennessee Department of Transportation. An efficient and thorough investigation allowed a resolution to be achieved without filing a complaint, conserving judicial resources and government funds. In addition to the monetary payment, Sherman-Dixie has entered into a monitoring agreement with the U.S. Department of Transportation, Federal Highway Administration. This monitoring agreement will require Sherman-Dixie to take certain compliance measures to reduce the likelihood of future violations of the False Claims Act and other procurement regulations.

This matter was investigated by the U.S. Department of Transportation, the FBI, and the United States Attorney’s Office for the Middle District of Tennessee. The United States was represented by Assistant U.S. Attorney Christopher C. Sabis.