Washington State Construction Company Settles Allegations of False Claims in Disadvantaged Business Enterprise Program

            Tri-State Construction, a privately-owned Washington State construction company, today agreed to pay more than $140,000 to settle allegations it submitted false records to the Washington State Department of Transportation related to the federally-funded I-5 HOV lane project between Port of Tacoma Road and the Pierce/King County line, announced U.S. Attorney Annette L. Hayes.  The settlement involves Tri-State’s claims from 2010 to 2014 that it was renting a specialized machine from a certified Disadvantaged Business Enterprise (DBE).  In fact, the machine was not owned by DBE – OMA Construction.  The machine was actually owned by Tri-State, which attempted to use a lease/purchase agreement to make it appear, consistent with DBE set-aside requirements for federally-funded highway projects, that OMA owned the machine.

            “Disadvantaged Business Enterprise fraud harms the integrity of the DBE program and law-abiding contractors by defeating efforts to ensure a level playing field in which all firms can compete fairly for contracts,” said William Swallow, Regional Special Agent-in-Charge of the U.S. Department of Transportation Office of Inspector General.  “Our agents will continue to work with the Secretary of Transportation and other Federal, State, and local law enforcement and prosecutorial colleagues to expose and shut down DBE fraud schemes that adversely affect public trust and DOT-assisted highway programs.”

            In all Tri-State will pay $142,440 to the U.S. Department of Transportation to settle the allegations.  The company does not admit any misconduct.  The machine at issue is a “chitosan” – used to process and clean wastewater generated by construction projects.  The adequacy of Tri-State’s work on the I-5 project is not disputed.

            The case was investigated by the U.S. Department of Transportation Office of Inspector General and the FBI.  The case was handled by Assistant United States Attorneys Kayla Stahman and Priscilla Chan.