Government Contractor Sentenced for Fraudulently Billing Federal and State Construction Contracts
BOSTON – VJ Associates, Inc. of Suffolk, based on Hicksville, N.Y., pleaded guilty and was sentenced today on criminal and civil charges relating to a long-running overbilling scheme involving numerous government-funded construction projects in Massachusetts and New York.
VJ Associates, Inc. of Suffolk pleaded guilty to conspiracy to commit wire fraud and was sentenced by U.S. District Court Judge Denise J. Casper to pay nearly $1.3 million in restitution and a fine of $530,000. Between this sentence and related civil settlements, VJ Associates, Inc. of Suffolk and its affiliated companies (collectively VJ Associates) will pay a total of $3.13 million in criminal and civil fines and restitution and be debarred permanently from participating in contracts funded by the U.S. Department of Transportation (DOT).
VJ Associates provided sub-contracted estimating and scheduling services for construction projects funded with state and federal money. Services included forecasting costs and resources to complete a project, and estimating the time necessary to complete milestones in a project. VJ Associates employees frequently billed government contracts hourly for their time. The DOT, the State of New York and the Commonwealth of Massachusetts funded many projects on which VJ Associates worked.
From at least January 2007 through August 2018, VJ Associates, Inc. of Suffolk—the largest and original VJ Associates entity—conspired with other VJ Associates entities and employees to pad bogus time charges on government construction contracts funded by the DOT, the State of New York and the Commonwealth of Massachusetts. As a result, the VJ Associates entities improperly received nearly $1.3 million in state and federal taxpayer money. The improper billing included, for example, hours employees spent working on unrelated projects, time spent on administrative tasks and time doing no work. Under pressure from management, employees openly discussed improper billing as “juicing” and “tagging” hours in order to “maximize” bills on government projects and not “leave money on the table.” One employee summed up his billing practices to his colleague as a “shell game” and explained that, when management “gave him a bit of trouble” about how he billed his time, he fraudulently maximized his hours billed because “what the hell,” management “pay[s] me every two weeks,” and he was “not the boss.”
The related civil settlement with the United States arose from a lawsuit filed by a whistleblower under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery. In connection with settlement with the United States, the whistleblower will receive 22.5% of the recovery.
The government’s resolution of this matter illustrates the government’s emphasis on combating fraud related to government-funded transportation projects. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Transportation, at 1-800-424-9071.
United States Attorney Andrew E. Lelling; Douglas Shoemaker, Regional Special Agent in Charge of the U.S. Department of Transportation Office of Inspector General; and Port Authority of New York and New Jersey Acting Inspector General Farbiarz made the announcement today. Assistant United States Attorneys Brian M. LaMacchia and Evan Gotlob of Lelling’s Office handled the matter.