Attorney General Grewal, U.S. Attorney Announce Settlement of False Claims Action Against New Jersey Construction Firm

TRENTON Attorney General Gurbir S. Grewal and U.S. Attorney Craig Carpenito announced today that a Burlington County construction company will pay New Jersey more than $499,000 to resolve allegations it committed multiple False Claims Act violations by contracting for public construction jobs while paying its workers a lower hourly wage than required by state and federal law.

 Under a settlement that resolves a joint state-federal investigation, Ranco Construction, of Southampton, will pay $1.5 million overall – with $499,886 going to the State. The settlement flows from an investigation of Ranco’s labor practices in New Jersey conducted by the Division of Law’s Government and Healthcare Fraud Section in cooperation with the U.S. Attorney’s Office for the District of New Jersey.

 The investigation began after a former Ranco employee filed a federal qui tam (or “whistle-blower”) lawsuit against the company. In that lawsuit, the ex-employee alleged that Ranco routinely entered into construction contracts with various State entities, municipalities and school districts contracts that were subject to hourly wage rates set under New Jersey’s Prevailing Wage Act but paid workers less, then falsified company payroll records to disguise the conduct. The lawsuit alleged that Ranco committed the same fraud with regard to federal agency construction jobs, including some for the federal Department of Defense.

“The rules are simple: if a construction company wants to do business with the State of New Jersey, it has to pay its workers a fair wage. Ranco took the State’s money but then failed to keep up its end of the bargain,” said Attorney General Grewal. “As part of today’s settlement, we are recovering nearly half-a-million dollars for New Jersey taxpayers. Just as importantly, we are sending an important message – vendors who do business with public entities in New Jersey must act with integrity and honesty, and will be held accountable if they don’t.”

 “Companies that contract with the federal government undertake an obligation to pay their employees a fair wage,” said U.S. Attorney Carpenito. “When contractors pay substandard wages and then falsely certify their compliance to the government, they not only cheat their employees, they also gain an unfair advantage in the contract bidding process, all at taxpayer expense.”

The joint state-federal investigation of Ranco’s labor, wage and accounting practices began after the former employee filed his lawsuit in U.S. District Court in New Jersey in 2015.

The worker, who had been employed by Ranco for a total of nine years first as a laborer and then as an electrician left the company in 2016. He alleged in his lawsuit that Ranco forced him out for objecting to the company’s allegedly unlawful practices.

As part of the settlement announced today, Ranco denies any liability or improper conduct. Under the agreement, 17 percent of the settlement payout to New Jersey will go to the ex-employee who sued Ranco. Another $71,689 will go to pay restitution specifically, fulfillment of unpaid wages for four Ranco workers, including the ex-employee who sued.

Assistant Attorney General Janine Matton, Deputy Attorney General Paul Juzdan and Deputy Attorney General Carla Pereira of the Division of Law’s Government & Healthcare Fraud Section, and Deputy Attorney General Nicholas Kant, formerly part of the Government & Healthcare Fraud Section and now Assistant Chief of the Banking and Insurance Section, handled the Ranco matter on behalf of the State.

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