PHILADELPHIA, PA – United States Attorney Jacqueline C. Romero announced that The Sherwin-Williams Company has agreed to pay $1 million to resolve False Claims Act allegations that it participated in a scheme to defraud the federal Disadvantaged Business Enterprise (DBE) program in connection with a contract to paint the George C. Platt Memorial Bridge in Philadelphia.
Governed by statutes and regulations, the DBE program provides opportunities for small businesses owned by socially and economically disadvantaged individuals to work on federally funded projects by requiring that government contracts set goals for DBE participation. A government contractor may claim credit toward a DBE goal only if a DBE serves a “commercially useful function” on the project. A DBE does not serve a commercially useful function, however, if it acts as a mere pass-through, or extra participant, through which funds are passed to create the appearance that historically disadvantaged businesses did the work.
According to the government’s investigation, this was precisely the case with the Platt Bridge project. In 2011, Hercules-Vimas Joint Venture, LLC was awarded a $42.7 million contract by the Pennsylvania Department of Transportation (PENNDOT) to paint the bridge. The contract, funded largely by the federal government, required that a percentage of work be performed by a DBE. To meet this requirement, Hercules-Vimas subcontracted with Vertech International, Inc., a DBE certified in...
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