Brainerd, MN — Anderson Brothers Construction Company of Brainerd, LLC has agreed to pay nearly $1.3 million to resolve federal and state allegations that it submitted falsified materials test results to the government as part of its road paving contracts. The settlement concludes a whistleblower-initiated case under the False Claims Act that scrutinized the company’s practices between 2017 and 2022.

According to a news release from the U.S. Attorney’s Office in Minnesota, Anderson Brothers was accused of “routinely and knowingly falsifying test results to make its paving material appear to be higher quality than it was,” with the intent of obtaining performance incentives and avoiding financial penalties under federally funded contracts.

As part of those contracts, the company was required to submit accurate quality control test results of paving materials. The Justice Department and State of Minnesota alleged that Anderson Brothers submitted fraudulent results to gain unearned financial rewards.

The civil settlement, totaling $1,295,610, will be divided between federal and state governments, with the United States receiving $660,761 and the State of Minnesota receiving $634,849.

“Protecting taxpayer dollars from fraud and abuse is one of our top priorities,” said Acting U.S. Attorney for the District of Minnesota Lisa D. Kirkpatrick. “The submission of false claims for federally funded government contracts will not be tolerated. This settlement should serve as proof that we will actively investigate this conduct whenever it occurs and will hold to account any company that fails to bill accurately for the products provided.”

The civil resolution stems from a qui tam complaint filed by Kacie Dixon, a former technician at the company. The qui tam provisions of the False Claims Act allow private individuals to sue on behalf of the government and receive a portion of any financial recovery.

Anderson Brothers Responds

In a statement addressing the settlement, Terry McFarlin, President & CEO of Anderson Brothers, emphasized that the company admitted no wrongdoing as part of the agreement.

“We’re pleased to have resolved the government’s concerns about our past testing protocols through a no-fault agreement. It lets us avoid the time, distraction and expense of lengthy government litigation and instead focus on taking care of our customers,” McFarlin said.

“This settlement does not affect our ability to serve our customers, take on new projects, or achieve our long-term goals; it represents about one-half of one percent of the value of the projects during this time. We’re excited for the future and for the opportunities to continue serving our customers and our communities to the highest standards of quality, compliance and service.”

Federal Officials Weigh In

Federal officials stressed the broader implications of the case.

Anthony Licari, Special Agent in Charge at the Department of Transportation Office of Inspector General for the Midwestern Region, noted the public safety risks of such misconduct.

“Today’s settlement reinforces the fact that companies doing business with the government must fully comply with federal regulations and contractual obligations. When fraudulent conduct like this undermines the integrity of highway paving, putting the safety of the travelling public at risk, it’s our job, together with our law enforcement and prosecutorial partners, to put an end to it.”

The resolution was the product of collaboration between the U.S. Department of Justice’s Civil Division, the U.S. Attorney’s Office for the District of Minnesota, the Office of Inspector General for the Department of Transportation, the Minnesota Attorney General’s Office, and the Minnesota Department of Transportation.

Officials made clear that the settlement resolves allegations only, and there has been no judicial determination of liability.

Originally reported by DL-online.