January 19, 2015 Contractor Fraud
Massachusetts Attorney General Settles False Claims Act Lawsuit Against Cleaning Company
The Massachusetts False Claims Act has proven time and time again to be a vital component in the war against fraud and wasteful misuse of taxpayer money. In other posts, we have discussed settlements with companies like Office Depot and an environmental cleanup outfit, both of which settled allegations of false claims with sizable contributions to the Massachusetts treasury.
In today’s post, we discuss a recent $650,000 settlement within the Commonwealth involving the National Water Main Cleaning Company and its alleged involvement in the submission of false claims to the Commonwealth government. While settlements with state governments tend to be smaller than those involving the federal government, today’s story nonetheless describes the nature of false claims and how fraud can occur in even the most unassuming industries.
Details of the case against National Water Main Cleaning Company
According to the allegations, the NWMCC entered into a contract with the Commonwealth to perform cleaning services around various Massachusetts municipalities. More specifically, its duties involved the cleanup of storage tanks, sewers, and catch basins in any cities or towns in need of such services. According to the Attorney General’s office, NWMCC submitted invoices to the cities of Boston, Framingham, and Waltham for work that was not performed or with inflated labor rates.
In addition to the false claims for payment, NWMCC also violated Massachusetts law by improperly disposing of wastewater and sewage in violation of the Massachusetts Clean Waters Act. Much like the federal False Claims Act, state false claims acts are generally triggered when a defendant submits a request for repayment for work that was conducted outside the confines of the law.
The investigation into NWMCC’s actions was conducted in a concerted effort between the Attorney General’s office and the Massachusetts Department of Environmental Protection.
Attorney General Martha Coakley said in a statement:
“Our office will vigorously pursue companies that submit false and inflated bills and records to public entities in order to increase their own profit….It is disappointing that a company dedicated to environmental services violated state laws designed to ensure a clean and safe environment. NWMC has agreed to put measures in place to prevent this from happening again.”
This is not NWMC’s first experience with the Massachusetts Attorney General’s Office. In 2012, the company was cited for egregious violations of wage and labor laws, including failure to report true and accurate payroll records. In that case, the company was ordered to pay $506,000 in restitution, $500,000 in fines, and $50,000 in penalties for failing to truthfully report payroll figures.
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