CHICAGO (Legal Newsline) - Illinois Attorney General Lisa Madigan and U.S. Attorney Zachary Fardon announced a $12 million whistleblower settlement on Thursday with a Chicago-based construction company for allegedly using women-owned businesses to fraudulently secure public projects.
James McHugh Construction Company allegedly represented that its subcontracting companies, Accurate Steel Installers (ASI) and Perdel Contracting Corp., would meet the legal requirements that a portion of the work be completed by women- or minority-owned businesses. While ASI and Perdel were certified as disadvantaged business enterprises (DBE), Madigan and Fardon alleged the companies failed to fulfill DBE requirements on seven public construction contracts obtained by McHugh.
DBE requirements seek to increase participation in public contracts by small businesses owned and controlled by minorities and women. McHugh worked on multiple public projects funded by the state and federal governments for work on Chicago-area highways, roads and public transit systems.
"Our investigation revealed that McHugh Construction falsely used subcontractors to help secure bids for major construction projects funded by and for Illinois taxpayers," Madigan said. "The company used women-owned businesses to submit false claims to the state and federal governments for millions of dollars when in fact, those businesses never completed the level of work required by law."
Under the terms of the settlement, McHugh must pay $12 million and take steps to ensure future DBE compliance.
A former employee of Perdel and ASI, Ryan Keiser, originally filed the whistleblower complaint against McHugh. Elizabeth Perino, the owner of Perdel and ASI, was charged by Fardon's office for her alleged role in the scheme.