Sources: U.S. Department of Justice; CP staff
A Middle East sister operation of New Jersey-based Colas USA has agreed to resolve allegations that it violated the False Claims Act by selling substandard concrete placed at U.S. Navy airfields in the Republic of Djibouti, nestled between Ethiopia and the strait linking the Red Sea and Gulf of Aden. Settlements with the Justice Department will sunset a seven-year old case that commenced after Colas Djibouti SARL informed the Department of Defense that materials supplied to U.S. Navy Facilities Engineering projects did not meet contract specifications.
A $3.9 million civil settlement resolves allegations that the producer knowingly provided concrete that did not meet aggregate gradation requirements, contained excessive alkali-silica reactive material, and exhibited elevated chloride content. Such conditions have the potential to promote early-age cracking, surface defects, and reinforcing steel corrosion, Justice officials contend, and can significantly impair the long-term durability of concrete on U.S. installations.
Concurrently, U.S. Attorney for the Southern District of California Robert Brewer has announced a separate Deferred Prosecution Agreement (DPA) where Colas Djibouti will admit to the underlying facts and accept responsibility to a one-count information for conspiracy to commit wire fraud. A $12,542,000 penalty will factor fine, restitution and $8 million contract payment forfeiture. The civil settlement credits half of the Colas Djibouti payment under the DPA and requires an additional $1,957,998 payment.
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