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Kleinberg Electric Admits Responsibility for Fraudulent Conduct and Agrees to Pay $936,000
Preet Bharara, the United States Attorney for the Southern District of New York, Barry Kluger, the Inspector General of the Metropolitan Transportation Authority (“MTA”), and Douglas Shoemaker, Regional Special Agent-in-Charge of the U.S. Department of Transportation, Office of the Inspector General (“USDOT-OIG”), announced today that the United States has filed and simultaneously settled a civil fraud lawsuit against a subcontractor, KLEINBERG ELECTRIC INC. (“KLEINBERG”), for engaging in fraudulent conduct designed to take advantage of the Disadvantaged Business Enterprise Program in order to secure a subcontract on a federally-funded project for the design and construction of the Fulton Street Transit Center Dey Street Concourse (the “Dey Street Project”).
KLEINBERG caused the prime contractor of the Dey Street Project to falsely represent to the MTA that KLEINBERG paid hundreds of thousands of dollars to a disadvantaged business enterprise (“DBE”) to perform legitimate work on the contract when, in reality, the DBE did not perform a “commercially useful function,” as required by the program’s regulations, and instead received a commission for the fraudulent use of its DBE status. As part of the settlement, KLEINBERG admitted and accepted responsibility for violating the DBE regulations governing the Dey Street Project and agreed to pay $936,000. The settlement was approved yesterday in Manhattan federal court by U.S. District Judge P. Kevin Castel.