Construction firms to pay $1.4 million over false claims
Three Massachusetts construction businesses will pay $1.4 million to settle claims by Attorney General Maura Healey that they lied about meeting minority contracting requirements.
CTA Construction Co., Inc., a Waltham general contractor, will pay $1.05 million to settle allegations by the attorney general that it falsely claimed to have hired Margen, Inc., a minority-owned subcontractor, for work on three public construction contracts. Federal and state laws require that businesses owned by women and minorities get a certain share of construction jobs.
Healey’s office alleged CTA listed Roxbury-based Margen, Inc., formerly known as Luxor Equipment Corp., Inc., as having conducted work on three projects that it did itself or hired Tewksbury’s MDR Construction Co., Inc. to do. MDR agreed to pay $150,000, and Margen agreed to pay $200,000 and accept a ban on doing business with the state of Massachusetts or any towns and cities.
“Equal opportunity requirements in government contracts should not be intentionally subverted,” Healey said in a statement.
The three contracts at the center of the case involved the construction of a field maintenance shop for the Army National Guard in Reading, the construction of a state police barracks at Logan Airport, and the construction of Hingham East Elementary School. Massport, which oversees Logan Airport, referred the case to the attorney general’s office.
Margen was barred from doing business with the federal government in February 2014, according to a spokesman for Healey’s office. Margen didn’t reply to a request for comment.
CTA said in a statement that it acted in good faith and hired minority- and women-owned businesses approved by the state. The company said it agreed to settle to avoid the expense and disruption of litigation, and said it “embraces Attorney General Healey’s fresh approach to a long-standing industry concern.”
Guy Martone, an attorney for MDR, said the company settled for business reasons, not because it was guilty of the charges. He said he believed MDR would prevail in court, but a trial would have been too expensive.