Asphalt Contractor to Pay $1.75M After False Claims Allegations

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Updated Jun 10, 2021
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A Minnesota asphalt paving contractor has reached a $1.75 million settlement after being accused of using unauthorized gravel materials on three road construction projects and making false claims about them, according to the U.S. Attorney's Office for the District of Minnesota.

The Attorney's Office alleges that Mark Sand & Gravel of Fergus Falls used substandard materials on paving projects on Highways 34, 59/10 and 78 in the Detroit Lakes area. The company used waste or shale rock in the gravel mixes on the federally funded projects between 2013 and 2015, the office says. The office also alleges the company made "materially false claims and statements in connection with its use of those materials."

“Performing road construction projects funded by the U.S. Department of Transportation comes with a set of detailed terms and specifications," says Andrea M. Kropf, special agent-In-charge for the Midwestern Region of the Department of Transportation Office of Inspector General.

"When companies fail to follow contract specifications, use unauthorized materials and make false statements concerning the quality of materials, the integrity of the work being performed is compromised.”

The contractor was cited under the U.S. and Minnesota false claims acts. “Failing to uphold contractual obligations by agreeing to do one thing but then doing another is not acceptable,” said Acting U.S. Attorney W. Anders Folk. “We will continue to use the False Claims Act and other tools at our disposal to ensure that contractors act with transparency and do the work they promised to do.”

In response to the allegations, Mark Sand & Gravel President Mark Thorson said in an email that they are the "result of a contractual, interpretive disagreement between Mark Sand & Gravel Co. and the Minnesota Department of Transportation."

"Although we strongly disagree with the allegations, we have reached a settlement that satisfies both MNDOT and the Federal Government," Thorson says. "As always, we strive to do quality work and we stand behind our product. As a result of dissatisfaction by MNDOT, we have agreed to this settlement."

The projects were administered by the Minnesota Department of Transportation, which also was a co-investigator in the case with the USDOT's Office of Inspector General. The U.S. and Minnesota DOTs will split the settlement according to the projects' original funding formulas, the Attorney's Office says. "The claims resolved by the settlement are allegations only; there has been no determination of liability."