U.S. settles Illinois dispute over Disadvantaged Business Enterprise fraud
Several parties have agreed to pay a six-figure penalty to resolve claims that they defrauded a program meant to help minority and women-owned businesses.
United Ironworkers, D&K Welding Services, Kim Rasnick, and Dorrie Wise-Harris have agreed to pay the United States and the State of Illinois $440,000 to resolve a civil False Claims Act investigation relating to fraud on the Disadvantaged Business Enterprise programs of the United States and the State of Illinois, U.S. Attorney Steven D. Weinhoeft said Thursday.
United and D&K are steel construction companies operating on highway and bridge projects in Illinois and other midwestern states.
The DBE program reflects Congress’s intent to combat discrimination against minority and women-owned businesses on federally-assisted surface transportation work. Under the DBE regulations, only businesses independently owned and operated by a minority or woman may be certified as a DBE.
The government alleged that, as a non-DBE, United and its president, Kim Rasnick, conspired with a DBE, D&K, and its president, Dorrie Wise-Harris, to provide materially false representations and information regarding ownership and control of D&K for DBE certification and recertification purposes.
The allegations were investigated by the U.S. Department of Transportation’s Office of Inspector General and culminated in this settlement.
“The DBE program is designed to provide business opportunities to minority and women owned businesses. Funds designated for that purpose should not be misallocated to businesses masquerading as legitimate DBEs,” said Weinhoeft.
Karl and Diana Jefferson, who own a steel construction firm in Southern Illinois, brought the allegations to light. The Jeffersons will receive $79,200 from the settlement proceeds.
The False Claims Act permits private individuals to sue on behalf of the government for false claims and to share in any recovery. The civil lawsuit was filed in the Southern District of Illinois and is captioned United States et al. v. United Ironworkers, Inc., et al., 17-cv-1402.
This matter was handled by the U.S. Attorney’s Office for the Southern District of Illinois and the Illinois Attorney General’s Office.