Md. Construction Company Admits To Federal Fraud
WASHINGTON (AP) -- A Maryland construction company has admitted to orchestrating phony partnerships to get millions in District of Columbia government contracts and agreed to pay a $2 million fine, ending a two-year fraud investigation.
A spokesman for the U.S. Attorney's Office for the District told The Associated Press on Monday that the office has reached the agreement with Forrester Construction Corp. of Rockville, Maryland. The company had been under investigation for two years over fraud in the procurement of $145 million in government contracts. The AP was first to report the existence of the investigation.
Forrester teamed up with small District firms to win the contracts by promising that the local firms would do 51 percent of the work. But instead, prosecutors say the companies entered into side agreements that called for the local firms to do little to no work in exchange for a kickback.
Critics say that kind of arrangement undercuts the purpose of a city government program that gives advantages to local companies seeking contracts and makes it difficult if not impossible for law-abiding firms to submit winning bids.
As part of the agreement, Forrester acknowledged that it entered into fraudulent partnerships that helped it win three high-profile District government contracts: $64 million to build a city agency headquarters; $56 million to modernize a high school; and $5.4 million to build a senior wellness center.
Forrester also partnered with another firm to win $20 million in additional contracts over a three-year period, prosecutors said.
The company's founder, John Richard "Rick" Forrester, committed suicide over Labor Day weekend. The AP reported in July that Forrester was among the firms being investigated for contracting fraud.
Under the agreement, Forrester will pay $2.15 million in fines, acknowledge its wrongdoing and undertake numerous remedial measures to ensure that it complies in the future with city contracting laws.
(Copyright 2014 by The Associated Press. All Rights Reserved.)