In today’s case, we explore a recent False Claims Act settlement involving allegations of payroll fraud against Circle C Construction – a firm tasked with complete construction projects on the U.S. Army base Fort Campbell. At the heart of the allegations are claims involving the Davis-Bacon Act, which is legislation drafted to ensure proper payment of workers under government contracts. In order to comply with the contract, Circle C was required to submit certifications that its payroll procedures complied with Davis-Bacon, as well as the terms of the contract between itself and the U.S. Army. Allegedly, Circle C not only failed to properly certify its payroll procedures, but it also unlawfully underpaid its electrical sub-contractors in violation of the terms of the contract.
Details of Wage Dispute Involving Circle C Construction
Under the terms and conditions of Circle C’s agreement with the U.S. Army, it was to arrange for the construction of buildings at Fort Campbell – a military base located in both Kentucky and Tennessee. The base, which straddles the border of the two states, is a large facility used by the U.S. Army and paid Circle C over $22 million to complete the project. Under the wage terms of the agreement, Circle C was to pay its electrical workers $19.19 per hour, as well as an additional $3.54 for any work performed in Kentucky. Circle C affirmed this requirement, and even informed the U.S. Army that its payroll specialists had attended training on the proper payment protocols and certifications.
According to the whistleblower, who is a former Circle C employee, the company not only did not make the proper regular certifications under the contract terms, but it did not actually pay its electricians the required amount. More specifically, payroll records reveal that electricians working on the project from 2005 through 2006 were actually paid between $12 and $16 per hour – well below the amount required, and certified to, under the agreement.
After the U.S. Department of Justice opted to intervene, the District Court judge ultimately found Circle C liable to the government and concluded it owed treble damages in an amount totaling $1.6 million. On appeal, the U.S. District Court for the Sixth Circuit confirmed that Circle C was liable, but held that a miscalculation had occurred in the trial court. On remand, the District Court revalued the claim by the whistleblower and found Circle C construction liable for over $760,000 in wages violations.
The amount owed to the whistleblower in this case has not been immediately disclosed.
Contact a Reputable Whistleblower Attorney Today
If you are aware of fraud occurring under a government contract and would like to discuss your information with a confidential and experienced whistleblower attorney, we encourage you to contact us today for more information. Under the False Claims Act, a relator (plaintiff) can obtain up to 25 percent of the recovery if the government intervenes, and up to 30 percent if the government opts not to get involved. To make an appointment, give Berger Montague a call today.