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False Claims Presentation by Jim Thiel Wisconsin DOT March 2009

APPENDIX A

FALSE CLAIMS ACT
31 USC 3729 TO 3732

31 USC § 3729. "False claims

(a) Liability for certain acts [Caution: For inflation-adjusted civil monetary penalties, see 28 CFR 85.3.]. Any person who--

(1) knowingly presents, or causes to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval;
(2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government;
(3) conspires to defraud the Government by getting a false or fraudulent claim allowed or paid;
(4) has possession, custody, or control of property or money used, or to be used, by the Government and, intending to defraud the Government or willfully to conceal the property, delivers, or causes to be delivered, less property than the amount for which the person receives a certificate or receipt;
(5) authorized to make or deliver a document certifying receipt of property used, or to be used, by the Government and, intending to defraud the Government, makes or delivers the receipt without completely knowing that the information on the receipt is true;
(6) knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the Government, or a member of the Armed Forces, who lawfully may not sell or pledge the property; or
(7) knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Government,

is liable to the United States Government for a civil penalty of not less than $ 5,000 and not more than $ 10,000, plus 3 times the amount of damages which the Government sustains because of the act of that person, except that if the court finds that—

(A) the person committing the violation of this subsection furnished officials of the United States responsible for investigating false claims violations with all information known to such person about the violation within 30 days after the date on which the defendant first obtained the information;
(B) such person fully cooperated with any Government investigation of such violation; and
(C) at the time such person furnished the United States with the information about the violation, no criminal prosecution, civil action, or administrative action had commenced under this title with respect to such violation, and the person did not have actual knowledge of the existence of an investigation into such violation;

the court may assess not less than 2 times the amount of damages which the Government sustains because of the act of the person. A person violating this subsection shall also be liable to the United States Government for the costs of a civil action brought to recover any such penalty or damages.

(b) Knowing and knowingly defined. For purposes of this section, the terms "knowing" and "knowingly" mean that a person, with respect to information—

(1) has actual knowledge of the information;
(2) acts in deliberate ignorance of the truth or falsity of the information; or
(3) acts in reckless disregard of the truth or falsity of the information,

and no proof of specific intent to defraud is required.

(c) Claim defined. For purposes of this section, "claim" includes any request or demand, whether under a contract or otherwise, for money or property which is made to a contractor, grantee, or other recipient if the United States Government provides any portion of the money or property which is requested or demanded, or if the Government will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded.

(d) Exemption from disclosure. Any information furnished pursuant to subparagraphs (A) through (C) of subsection (a) shall be exempt from disclosure under section 552 of title 5.

(e) Exclusion. This section does not apply to claims, records, or statements made under the Internal Revenue Code of 1986.

31 USC § 3730. Civil actions for false claims

(a) Responsibilities of the Attorney General. The Attorney General diligently shall investigate a violation under section 3729 [31 USCS § 3729]. If the Attorney General finds that a person has violated or is violating section 3729 [31 USCS § 3729], the Attorney General may bring a civil action under this section against the person.

(b) Actions by private persons.

(1) A person may bring a civil action for a violation of section 3729 [31 USCS § 3729] for the person and for the United States Government. The action shall be brought in the name of the Government. The action may be dismissed only if the court and the Attorney General give written consent to the dismissal and their reasons for consenting.
(2) A copy of the complaint and written disclosure of substantially all material evidence and information the person possesses shall be served on the Government pursuant to Rule 4(d)(4) of the Federal Rules of Civil Procedure. The complaint shall be filed in camera, shall remain under seal for at least 60 days, and shall not be served on the defendant until the court so orders. The Government may elect to intervene and proceed with the action within 60 days after it receives both the complaint and the material evidence and information.
(3) The Government may, for good cause shown, move the court for extensions of the time during which the complaint remains under seal under paragraph (2). Any such motions may be supported by affidavits or other submissions in camera. The defendant shall not be required to respond to any complaint filed under this section until 20 days after the complaint is unsealed and served upon the defendant pursuant to Rule 4 of the Federal Rules of Civil Procedure.
(4) Before the expiration of the 60-day period or any extensions obtained under paragraph (3), the Government shall--
(A) proceed with the action, in which case the action shall be conducted by the Government; or
(B) notify the court that it declines to take over the action, in which case the person bringing the action shall have the right to conduct the action.
(5) When a person brings an action under this subsection, no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.

(c) Rights of the parties to qui tam actions.

(1) If the Government proceeds with the action, it shall have the primary responsibility for prosecuting the action, and shall not be bound by an act of the person bringing the action. Such person shall have the right to continue as a party to the action, subject to the limitations set forth in paragraph (2).
(2) (A) The Government may dismiss the action notwithstanding the objections of the person initiating the action if the person has been notified by the Government of the filing of the motion and the court has provided the person with an opportunity for a hearing on the motion.
(B) The Government may settle the action with the defendant notwithstanding the objections of the person initiating the action if the court determines, after a hearing, that the proposed settlement is fair, adequate, and reasonable under all the circumstances. Upon a showing of good cause, such hearing may be held in camera.
(C) Upon a showing by the Government that unrestricted participation during the course of the litigation by the person initiating the action would interfere with or unduly delay the Government's prosecution of the case, or would be repetitious, irrelevant, or for purposes of harassment, the court may, in its discretion, impose limitations on the person's participation, such as--
(i) limiting the number of witnesses the person may call;
(ii) limiting the length of the testimony of such witnesses;
(iii) limiting the person's cross-examination of witnesses; or
(iv) otherwise limiting the participation by the person in the litigation.
(D) Upon a showing by the defendant that unrestricted participation during the course of the litigation by the person initiating the action would be for purposes of harassment or would cause the defendant undue burden or unnecessary expense, the court may limit the participation by the person in the litigation.
(3) If the Government elects not to proceed with the action, the person who initiated the action shall have the right to conduct the action. If the Government so requests, it shall be served with copies of all pleadings filed in the action and shall be supplied with copies of all deposition transcripts (at the Government's expense). When a person proceeds with the action, the court, without limiting the status and rights of the person initiating the action, may nevertheless permit the Government to intervene at a later date upon a showing of good cause.
(4) Whether or not the Government proceeds with the action, upon a showing by the Government that certain actions of discovery by the person initiating the action would interfere with the Government's investigation or prosecution of a criminal or civil matter arising out of the same facts, the court may stay such discovery for a period of not more than 60 days. Such a showing shall be conducted in camera. The court may extend the 60-day period upon a further showing in camera that the Government has pursued the criminal or civil investigation or proceedings with reasonable diligence and any proposed discovery in the civil action will interfere with the ongoing criminal or civil investigation or proceedings.
(5) Notwithstanding subsection (b), the Government may elect to pursue its claim through any alternate remedy available to the Government, including any administrative proceeding to determine a civil money penalty. If any such alternate remedy is pursued in another proceeding, the person initiating the action shall have the same rights in such proceeding as such person would have had if the action had continued under this section. Any finding of fact or conclusion of law made in such other proceeding that has become final shall be conclusive on all parties to an action under this section. For purposes of the preceding sentence, a finding or conclusion is final if it has been finally determined on appeal to the appropriate court of the United States, if all time for filing such an appeal with respect to the finding or conclusion has expired, or if the finding or conclusion is not subject to judicial review.

(d) Award to qui tam plaintiff.

(1) If the Government proceeds with an action brought by a person under subsection (b), such person shall, subject to the second sentence of this paragraph, receive at least 15 percent but not more than 25 percent of the proceeds of the action or settlement of the claim, depending upon the extent to which the person substantially contributed to the prosecution of the action. Where the action is one which the court finds to be based primarily on disclosures of specific information (other than information provided by the person bringing the action) relating to allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government [General] Accounting Office report, hearing, audit, or investigation, or from the news media, the court may award such sums as it considers appropriate, but in no case more than 10 percent of the proceeds, taking into account the significance of the information and the role of the person bringing the action in advancing the case to litigation. Any payment to a person under the first or second sentence of this paragraph shall be made from the proceeds. Any such person shall also receive an amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable attorneys' fees and costs. All such expenses, fees, and costs shall be awarded against the defendant.
(2) If the Government does not proceed with an action under this section, the person bringing the action or settling the claim shall receive an amount which the court decides is reasonable for collecting the civil penalty and damages. The amount shall be not less than 25 percent and not more than 30 percent of the proceeds of the action or settlement and shall be paid out of such proceeds. Such person shall also receive an amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable attorneys' fees and costs. All such expenses, fees, and costs shall be awarded against the defendant.
(3) Whether or not the Government proceeds with the action, if the court finds that the action was brought by a person who planned and initiated the violation of section 3729 [31 USCS § 3729] upon which the action was brought, then the court may, to the extent the court considers appropriate, reduce the share of the proceeds of the action which the person would otherwise receive under paragraph (1) or (2) of this subsection, taking into account the role of that person in advancing the case to litigation and any relevant circumstances pertaining to the violation. If the person bringing the action is convicted of criminal conduct arising from his or her role in the violation of section 3729 [31 USCS § 3729], that person shall be dismissed from the civil action and shall not receive any share of the proceeds of the action. Such dismissal shall not prejudice the right of the United States to continue the action, represented by the Department of Justice.
(4) If the Government does not proceed with the action and the person bringing the action conducts the action, the court may award to the defendant its reasonable attorneys' fees and expenses if the defendant prevails in the action and the court finds that the claim of the person bringing the action was clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment.

(e) Certain actions barred.
(1) No court shall have jurisdiction over an action brought by a former or present member of the armed forces under subsection (b) of this section against a member of the armed forces arising out of such person's service in the armed forces.
(2) (A) No court shall have jurisdiction over an action brought under subsection (b) against a Member of Congress, a member of the judiciary, or a senior executive branch official if the action is based on evidence or information known to the Government when the action was brought.
(B) For purposes of this paragraph, "senior executive branch official" means any officer or employee listed in paragraphs (1) through (8) of section 101(f) of the Ethics in Government Act of 1978 (5 U.S.C. App.).
(3) In no event may a person bring an action under subsection (b) which is based upon allegations or transactions which are the subject of a civil suit or an administrative civil money penalty proceeding in which the Government is already a party.
(4) (A) No court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government [General] Accounting Office report, hearing, audit, or investigation, or from the news media, unless the action is brought by the Attorney General or the person bringing the action is an original source of the information.
(B) For purposes of this paragraph, "original source" means an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action under this section which is based on the information.

(f) Government not liable for certain expenses. The Government is not liable for expenses which a person incurs in bringing an action under this section.

(g) Fees and expenses to prevailing defendant. In civil actions brought under this section by the United States, the provisions of section 2412(d) of title 28 shall apply.

(h) Any employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because of lawful acts done by the employee on behalf of the employee or others in furtherance of an action under this section, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under this section, shall be entitled to all relief necessary to make the employee whole. Such relief shall include reinstatement with the same seniority status such employee would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys' fees. An employee may bring an action in the appropriate district court of the United States for the relief provided in this subsection.

31 USC § 3731. False claims procedure

(a) A subpena [subpoena] requiring the attendance of a witness at a trial or hearing conducted under section 3730 of this title [31 USCS § 3730] may be served at any place in the United States.

(b) A civil action under section 3730 [31 USCS § 3730] may not be brought--
(1) more than 6 years after the date on which the violation of section 3729 [31 USCS § 3729] is committed, or
(2) more than 3 years after the date when facts material to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances, but in no event more than 10 years after the date on which the violation is committed,

whichever occurs last.

(c) In any action brought under section 3730 [31 USCS § 3730], the United States shall be required to prove all essential elements of the cause of action, including damages, by a preponderance of the evidence.

(d) Notwithstanding any other provision of law, the Federal Rules of Criminal Procedure, or the Federal Rules of Evidence, a final judgment rendered in favor of the United States in any criminal proceeding charging fraud or false statements, whether upon a verdict after trial or upon a plea of guilty or nolo contendere, shall estop the defendant from denying the essential elements of the offense in any action which involves the same transaction as in the criminal proceeding and which is brought under subsection (a) or (b) of section 3730 [31 USCS § 3730].

31 USC § 3732. False claims jurisdiction

(a) Actions under section 3730. Any action under section 3730 [31 USCS § 3730] may be brought in any judicial district in which the defendant or, in the case of multiple defendants, any one defendant can be found, resides, transacts business, or in which any act proscribed by section 3729 [31 USCS § 3729] occurred. A summons as required by the Federal Rules of Civil Procedure shall be issued by the appropriate district court and served at any place within or outside the United States.

(b) Claims under State law. The district courts shall have jurisdiction over any action brought under the laws of any State for the recovery of funds paid by a State or local government if the action arises from the same transaction or occurrence as an action brought under section 3730.

APPENDIX B

Table 1: States with False Claim, False Statement, and Other Fraud Statutes
[Source: "NCHRP 20-6, Study Topic 13-1, A Survey of State DOT Practices Involving False Claims Act, Disadvantaged Enterprise Fraud, and Contractor Suspension and Debarment"]
STATESGeneral False Claims StatutesOther False Claims StatutesFalse StatementRICOQui Tam ActionCriminal Penalties Included in the StatutesCivil Penalties Included in the StatutesConstruction Related False Claims Included in the Statutes
Alabama  X  X  
AlaskaX     X 
ArizonaX X   X 
Arkansas X (medical)    X 
CaliforniaX   X XX
Colorado  X  X  
Connecticut X (medical)   XX 
DelawareX  XX XX
D.C.X   X XX
FloridaX   X X 
Georgia  X  XXX
HawaiiX   X X 
Idaho X (wages & other comp.)   XX 
IllinoisX X X X 
IndianaX       
Iowa  X   X 
Kansas X (medical)      
Kentucky  X (advertising)  X  
Louisiana X (medical)  X X 
MaineX X  XX 
Maryland  X   X 
MassachusettsX     XX
Michigan X (medical)    XX 
MinnesotaXX(medical)    XX 
MississippiX X  XXX
Missouri X(medical) X  X  
MontanaX     XX
Nebraska  X(insurance employee)  X  
NevadaX X   XX
New HampshireX     XX
New Jersey  X  X  
New Mexico  X (medical)  X X 
New York  X  XX 
N. CarolinaX     X
N. Dakota  X  X  
OhioX X  X  
OklahomaX    X  
Oregon X(medical)   X  
Pennsylvania  X  X  
Puerto Rico X(insurance)    X  
Rhode Island  X  XX 
S. Carolina  X  X  
S. Dakota X (theft by deception) X  X  
Tennessee X (medical)    XX
Texas X (medical)    X 
UtahX X  XX 
VermontX X  X  
Virginia X (taxpayer)X   XX
WashingtonX      X
W. Virginia X (taxpayer) X   XX
Wisconsin  X  X  
WyomingX    X  
TOTALS2316 2618 27 32 13

APPENDIX C

MEMORANDUM
Subject: Action: FHWA Non-procurement Debarment Date: June 12, 2007
From: (Original Signed by)
Matthew R. Hake
Division Administrator (Actmg)
Madison, WI
Refer To: HAD-WI
To: To: King W. Gee
Associate Administrator for Infrastructure, HIF-l

In order to protect the public interest and Federal Government programs, we request that you take action to debar Kasner Transport, Inc. and Darrell C. Kasner (Offending Parties) for a period of 3 years pursuant to Executive Order 12549; the U.S. Department of Transportation's (US DOT's) implementing regulations in 49 CFR Part 29, and FHWA Order 2000.2A, Nonprocurement Suspension and Debarment Process.

In accordance with 49 CFR 29.110, these proposed debarments are consistent with the Federal government's policy to use the discretionary action of suspension and debarment to conduct business only with responsible persons and to protect the public interest, the Federal government, and the integrity of Federal programs. The specific causes for the proposed debarments are as follows:

1. On March 14,2007 Darrell Kasner, born October 24,1958, of7799 County Trunk A, Arpin, Wisconsin 54410, pleaded guilty in the U.S. District Court (Western District of Wisconsin) in Madison, Wisconsin to one count of violating 18 U.S.C. Section 1020, Making False Representations and Reports, a Class D felony.

2. On May 23, 2007 U.S. District Judge John C. Shabaz sentenced Darrell Kasner to three months in a federal prison, reporting on July 6, 2007, followed by two years of supervised release. Mr. Kasner must also pay a $1,000 fine to the Western District Clerk of Court, a $100 criminal assessment pursuant to 18 U.S.C. Section 3013, and restitution in the amount of $28,090.59 payable to the Western District Clerk of Court for disbursement to the U.S. Department of Transportation, Office of the Inspector General, 111 North Canal Street, Room 677, Chicago, IL 60606. The Court noted that the restitution was paid in full prior to sentencing.

3. Darrell Kasner owned Kasner's Transport Inc. (Kasner's Transport) .in Wood County, Wisconsin. Kasner's Transport owned two dump trucks providing transport services for hire by contractors in road building and other construction industries, on Wisconsin Department of Transportation (WisDOT) and other federal-aid jobs, Kasner was obligated to pay its drivers the higher of federal or state prevailing wages. To demonstrate compliance with the prevailing wage laws incorporated into the federal-aid contracts, Kasner was required to submit certified payroll records showing employee hours, wage rate, and wages paid.

4. From August 2002 to September of 2003 Kasner was contracted by Ames Construction, Inc. of Burnsville, Minnesota to provide transport services as a subcontractor under two WisDOT federal-aid contracts involving work on Highway 10 in Winnebago County, Wisconsin. The prime contracts were awarded in December 2001 and April 2002 for $10,992,954.35 and $12,234,304.55 respectively. During his work on these federally-funded contracts, Kasner paid his drivers approximately $14 an hour, while the prevailing wage rate for his employees was approximately $30 an hour. To conceal his underpayment Kasner caused the production and submission to WisDOT of false certified payrolls. These documents showed the correct wage rate, but falsely showed Kasner employees working fewer hours than they actually worked. As a result of Kasner's underpayment his employee drivers lost approximately $24,000 in pay.

The above criminal proceedings were the result of an investigation conducted by the U.S. Department of Transportation, Office of the Inspector General. The underlying underpayments were documented as a result of an investigation conducted by WisDOT following a prevailing wage complaint. As a result of this wage investigation the Kasner's Transport employees received their appropriate back pay.

Kasner's Transport is a small trucking firm doing a minimum amount of trucking on federal-aid projects in Wisconsin. There are a substantial number of trucking firms, and owner-operators, able to provide the same services on future federal-aid projects in the State. Therefore since more than adequate competition exists, the proposed debarment of the Offending Parties will have minimal impact on the Federal-aid program in Wisconsin.

It is the position of the Wisconsin Division Office that the seriousness and the circumstances of this case warrant the debarment of Darrell Kasner from Federal financial and non-financial assistance and benefits under Federal programs and activities (non-procurement). Moreover the conduct of this individual can be imputed to the company that he has an ownership interest in Kasner's Transport Inc., pursuant to 49 CFR 29.630. Accordingly we are recommending that the firm is also debarred. In regard to the seriousness of this case we note several factors that support the imposition of a debarment for a full three years. First, Kasner submitted false documentation concerning his compliance (or noncompliance) with express contract requirements set forth in two federal-aid contracts, a practice that strikes at the heart of the Federal-aid program and directly and negatively impacts the ability of the State and FHWA to obtain full use and benefit of limited federal and state funds. Second, Kasner coerced his employees into signing false driver time cards, placing his employees at legal risk. Finally, even after the facts were fully documented, Kasner's continued to fail to accept responsibility for his actions and instead engaged in a pattern of denial and delay.

In regards to the time period for the debarment, our opinion is that the Offending Parties warrant a debarment for a full three year time period. However, for administrative convenience we recommend that the Offending Parties be granted consideration for the time period (starting in October 30, 2006) for which the firm was suspended by WisDOT. Therefore we recommend that the Offending Parties be debarred with the debarment to end on October 30,2009.

Primary point of contact for this office is Bill Stark, who can be reached at (608) 829-7516.

Attachment (2)
1. May 23,2007 Sentencing Judgment, US v. Darrell Kasner, filed May 24, 2007
2. March 6, 2007 Plea Agreement, US v. Darrell Kasner, filed March 15,2007

cc: Mr. Michael Harkins, Program Legal Services Division (HCC-30)
(Memorandum & Attachments)
Mr. Donald Miller, WisDOT (Memorandum Only)
Mr. Allyn Lepeska, WisDOT (Memorandum Only

APPENDIX D

PRESS RELEASE
Erik C. Peterson
United States Attorney
Western District of Wisconsin
(608) 264-5158
TTY (608) 264-5006
www.usdoj.gov/usao/wiw

For Immediate Release
March 14, 2007

Contact Person
David J. Reinhard
Assistant U.S. Attorney

Madison, Wisconsin -- Erik C. Peterson, United States Attorney for the Western District of Wisconsin, announced that Darrell Kasner, 48, of Arpin, Wisconsin, pleaded guilty today in U.S. District Court in Madison to highway project fraud.

Darrell Kasner owned Kasner's Transport Inc. in Wood County, Wisconsin. Kasner's Transport owned two dump trucks providing transport services for hire by contractors in road building and other construction industries. On Wisconsin Department of Transportation (WISDOT) and other federal-aid jobs, Kasner is obligated to pay its drivers the higher of the federal or state prevailing wage. To demonstrate compliance with prevailing wage laws, subcontractors like Kasner must submit certified payroll records showing employee hours and wage rates.

From August 2002 to September of 2003, Kasner was hired by Ames Construction to provide transport services on the Highway 10 project near Winchester, Wisconsin. During this federally-funded project, Kasner paid his drivers approximately $14 an hour. The prevailing wage for this job was approximately $30 an hour. To conceal his underpayment to drivers, Kasner caused the production of false certified payrolls. These documents falsely showed Kasner employees working fewer hours and being paid the prevailing wage. As a result of Kasner's underpayment, the loss to the drivers totaled approximately $24,000.

U.S. District Judge John C. Shabaz scheduled sentencing for May 23, 2007, at 1:15 pm. Kasner faces a maximum penalty of five years in prison and a $250,000 fine. The charges against Kasner were the result of an investigation conducted by the U.S. Department of Transportation, Office of Inspector General. The prosecution of the case has been handled by Assistant U.S. Attorney David J. Reinhard.

APPENDIX E

PRESS RELEASE
Erik C. Peterson
United States Attorney
Western District of Wisconsin
(608) 264-5158
TTY (608) 264-5006
www.usdoj.gov/usao/wiw

Contact Person
David J. Reinhard
Assistant U.S. Attorney

For Immediate Release
May 23, 2007

Contact Person
David J. Reinhard
Assistant U.S. Attorney

Madison, Wisconsin -- Erik C. Peterson, United States Attorney for the Western District of Wisconsin, announced that Darrell Kasner, 48, of Arpin, Wisconsin, was sentenced today by U.S. District Judge John C. Shabaz to 3 months in federal prison, a $1,000 fine, and two years of supervised release for highway project fraud. Kasner pleaded guilty to this charge on March 14, 2007.

Darrell Kasner owned and operated Kasner's Transport in Wood County, Wisconsin. Kasner's Transport owned two dump trucks providing transport services for hire by contractors in road building and other construction industries. On Wisconsin Department of Transportation (WISDOT) and other federal-aid jobs, Kasner's was obligated to pay its drivers the higher of the federal or state prevailing wage. To demonstrate compliance with prevailing wage laws, subcontractors like Kasner must submit certified payroll records showing employee hours and wage rates. These payroll records are submitted to the prime contractor, who in turn submits them to WISDOT.

From August 2002 to September of 2003, Kasner was hired by Ames Construction to provide transport services on the Highway 10 project near Winchester, Wisconsin. During this federally funded project, Kasner paid his drivers approximately $14 an hour. The prevailing wage for this job was around $30 an hour. To conceal his underpayment to drivers, Kasner caused the production of false certified payrolls.

These documents falsely showed Kasner employees working fewer hours and being paid the prevailing wage. One of Kasner’s drivers covertly tape recorded Kasner admitting that he was not paying the prevailing wage. As a result of Kasner's underpayment, the loss to the drivers totaled approximately $28,000.

The charges against Kasner were the result of an investigation conducted by United States Department of Transportation, Office of Inspector General and the Wisconsin Department of Transportation. The prosecution of the case has been handled by Assistant U.S. Attorney David J. Reinhard.

APPENDIX F

An example of Wisconsin's Monthly updated listing of Disapproved, Debarred and Suspended contractors

APPENDIX G

SEC. 1553. PROTECTING STATE AND LOCAL GOVERNMENT AND CONTRACTOR WHISTLEBLOWERS.

(a) Prohibition of Reprisals.--An employee of any non-Federal employer receiving covered funds may not be discharged, demoted, or otherwise discriminated against as a reprisal for disclosing, including a disclosure made in the ordinary course of an employee's duties, to the Board, an inspector general, the Comptroller General, a member of Congress, a State or Federal regulatory or law enforcement agency, a person with supervisory authority over the employee (or such other person working for the employer who has the authority to investigate, discover, or terminate misconduct), a court or grand jury, the head of a Federal agency, or their representatives, information that the employee reasonably believes is evidence of--

(1) gross mismanagement of an agency contract or grant relating to covered funds;
(2) a gross waste of covered funds;
(3) a substantial and specific danger to public health or safety related to the implementation or use of covered funds;
(4) an abuse of authority related to the implementation or use of covered funds; or
(5) a violation of law, rule, or regulation related to an agency contract (including the competition for or negotiation of a contract) or grant, awarded or issued relating to covered funds.

(b) Investigation of Complaints.--

(1) IN GENERAL.--A person who believes that the person has been subjected to a reprisal prohibited by subsection (a) may submit a complaint regarding the reprisal to the appropriate inspector general. Except as provided under paragraph (3), unless the inspector general determines that the complaint is frivolous, does not relate to covered funds, or another Federal or State judicial or administrative proceeding has previously been invoked to resolve such complaint, the inspector general shall investigate the complaint and, upon completion of such investigation, submit a report of the findings of the investigation to the person, the person's employer, the head of the appropriate agency, and the Board.

(2) TIME LIMITATIONS FOR ACTIONS.--

(A) IN GENERAL.--Except as provided under subparagraph (B), the inspector general shall, not later than 180 days after receiving a complaint under paragraph (1)--

(i) make a determination that the complaint is frivolous, does not relate to covered funds, or another Federal or State judicial or administrative proceeding has previously been invoked to resolve such complaint; or
(ii) submit a report under paragraph (1).

(B) EXTENSIONS.--

(i) VOLUNTARY EXTENSION AGREED TO BETWEEN INSPECTOR GENERAL AND COMPLAINANT.--If the inspector general is unable to complete an investigation under this section in time to submit a report within the 180-day period specified under subparagraph (A) and the person submitting the complaint agrees to an extension of time, the inspector general shall submit a report under paragraph (1) within such additional period of time as shall be agreed upon between the inspector general and the person submitting the complaint.
(ii) EXTENSION GRANTED BY INSPECTOR GENERAL.--If the inspector general is unable to complete an investigation under this section in time to submit a report within the 180-day period specified under subparagraph (A), the inspector general may extend the period for not more than 180 days without agreeing with the person submitting the complaint to such extension, provided that the inspector general provides a written explanation (subject to the authority to exclude information under paragraph (4)(C)) for the decision, which shall be provided to both the person submitting the complaint and the non-Federal employer.
(iii) SEMI-ANNUAL REPORT ON EXTENSIONS.--The inspector general shall include in semi-annual reports to Congress a list of those investigations for which the inspector general received an extension.

(3) DISCRETION NOT TO INVESTIGATE COMPLAINTS.--
[Page: H1356]

(A) IN GENERAL.--The inspector general may decide not to conduct or continue an investigation under this section upon providing to the person submitting the complaint and the non-Federal employer a written explanation (subject to the authority to exclude information under paragraph (4)(C)) for such decision.
(B) ASSUMPTION OF RIGHTS TO CIVIL REMEDY.--Upon receipt of an explanation of a decision not to conduct or continue an investigation under subparagraph (A), the person submitting a complaint shall immediately assume the right to a civil remedy under subsection (c)(3) as if the 210-day period specified under such subsection has already passed.
(C) SEMI-ANNUAL REPORT.--The inspector general shall include in semi-annual reports to Congress a list of those investigations the inspector general decided not to conduct or continue under this paragraph.

(4) ACCESS TO INVESTIGATIVE FILE OF INSPECTOR GENERAL.--

(A) IN GENERAL.--The person alleging a reprisal under this section shall have access to the investigation file of the appropriate inspector general in accordance with section 552a of title 5, United States Code (commonly referred to as the "Privacy Act"). The investigation of the inspector general shall be deemed closed for purposes of disclosure under such section when an employee files an appeal to an agency head or a court of competent jurisdiction.
(B) CIVIL ACTION.--In the event the person alleging the reprisal brings suit under subsection (c)(3), the person alleging the reprisal and the non-Federal employer shall have access to the investigative file of the inspector general in accordance with the Privacy Act.
(C) EXCEPTION.--The inspector general may exclude from disclosure--

(i) information protected from disclosure by a provision of law; and
(ii) any additional information the inspector general determines disclosure of which would impede a continuing investigation, provided that such information is disclosed once such disclosure would no longer impede such investigation, unless the inspector general determines that disclosure of law enforcement techniques, procedures, or information could reasonably be expected to risk circumvention of the law or disclose the identity of a confidential source.

(5) PRIVACY OF INFORMATION.--An inspector general investigating an alleged reprisal under this section may not respond to any inquiry or disclose any information from or about any person alleging such reprisal, except in accordance with the provisions of section 552a of title 5, United States Code, or as required by any other applicable Federal law.

(c) Remedy and Enforcement Authority.--

(1) BURDEN OF PROOF.--

(A) DISCLOSURE AS CONTRIBUTING FACTOR IN REPRISAL.--

(i) IN GENERAL.--A person alleging a reprisal under this section shall be deemed to have affirmatively established the occurrence of the reprisal if the person demonstrates that a disclosure described in subsection (a) was a contributing factor in the reprisal.
(ii) USE OF CIRCUMSTANTIAL EVIDENCE.--A disclosure may be demonstrated as a contributing factor in a reprisal for purposes of this paragraph by circumstantial evidence, including--

(I) evidence that the official undertaking the reprisal knew of the disclosure; or
(II) evidence that the reprisal occurred within a period of time after the disclosure such that a reasonable person could conclude that the disclosure was a contributing factor in the reprisal.

(B) OPPORTUNITY FOR REBUTTAL.--The head of an agency may not find the occurrence of a reprisal with respect to a reprisal that is affirmatively established under subparagraph (A) if the non-Federal employer demonstrates by clear and convincing evidence that the non-Federal employer would have taken the action constituting the reprisal in the absence of the disclosure.

(2) AGENCY ACTION.--Not later than 30 days after receiving an inspector general report under subsection (b), the head of the agency concerned shall determine whether there is sufficient basis to conclude that the non-Federal employer has subjected the complainant to a reprisal prohibited by subsection (a) and shall either issue an order denying relief in whole or in part or shall take 1 or more of the following actions:

(A) Order the employer to take affirmative action to abate the reprisal.
(B) Order the employer to reinstate the person to the position that the person held before the reprisal, together with the compensation (including back pay), compensatory damages, employment benefits, and other terms and conditions of employment that would apply to the person in that position if the reprisal had not been taken.
(C) Order the employer to pay the complainant an amount equal to the aggregate amount of all costs and expenses (including attorneys' fees and expert witnesses' fees) that were reasonably incurred by the complainant for, or in connection with, bringing the complaint regarding the reprisal, as determined by the head of the agency or a court of competent jurisdiction.

(3) CIVIL ACTION.--If the head of an agency issues an order denying relief in whole or in part under paragraph (1), has not issued an order within 210 days after the submission of a complaint under subsection (b), or in the case of an extension of time under subsection (b)(2)(B)(i), within 30 days after the expiration of the extension of time, or decides under subsection (b)(3) not to investigate or to discontinue an investigation, and there is no showing that such delay or decision is due to the bad faith of the complainant, the complainant shall be deemed to have exhausted all administrative remedies with respect to the complaint, and the complainant may bring a de novo action at law or equity against the employer to seek compensatory damages and other relief available under this section in the appropriate district court of the United States, which shall have jurisdiction over such an action without regard to the amount in controversy. Such an action shall, at the request of either party to the action, be tried by the court with a jury.
(4) JUDICIAL ENFORCEMENT OF ORDER.--Whenever a person fails to comply with an order issued under paragraph (2), the head of the agency shall file an action for enforcement of such order in the United States district court for a district in which the reprisal was found to have occurred. In any action brought under this paragraph, the court may grant appropriate relief, including injunctive relief, compensatory and exemplary damages, and attorneys fees and costs.
(5) JUDICIAL REVIEW.--Any person adversely affected or aggrieved by an order issued under paragraph (2) may obtain review of the order's conformance with this subsection, and any regulations issued to carry out this section, in the United States court of appeals for a circuit in which the reprisal is alleged in the order to have occurred. No petition seeking such review may be filed more than 60 days after issuance of the order by the head of the agency. Review shall conform to chapter 7 of title 5, United States Code.

(d) Nonenforceability of Certain Provisions Waiving Rights and Remedies or Requiring Arbitration of Disputes.--

(1) WAIVER OF RIGHTS AND REMEDIES.--Except as provided under paragraph (3), the rights and remedies provided for in this section may not be waived by any agreement, policy, form, or condition of employment, including by any predispute arbitration agreement.
(2) PREDISPUTE ARBITRATION AGREEMENTS.--Except as provided under paragraph (3), no predispute arbitration agreement shall be valid or enforceable if it requires arbitration of a dispute arising under this section.
(3) EXCEPTION FOR COLLECTIVE BARGAINING AGREEMENTS.--Notwithstanding paragraphs (1) and (2), an arbitration provision in a collective bargaining agreement shall be enforceable as to disputes arising under the collective bargaining agreement.

(e) Requirement to Post Notice of Rights and Remedies.--Any employer receiving covered funds shall post notice of the rights and remedies provided under this section.
(f) Rules of Construction.--

(1) NO IMPLIED AUTHORITY TO RETALIATE FOR NON-PROTECTED DISCLOSURES.--Nothing in this section may be construed to authorize the discharge of, demotion of, or discrimination against an employee for a disclosure other than a disclosure protected by subsection (a) or to modify or derogate from a right or remedy otherwise available to the employee.
(2) RELATIONSHIP TO STATE LAWS.--Nothing may be construed to preempt, preclude, or limit the protections provided for public or private employees under State whistleblower laws.

(g) Definitions.--In this section:

(1) ABUSE OF AUTHORITY.--The term "abuse of authority" means an arbitrary and capricious exercise of authority by a contracting official or employee that adversely affects the rights of any person, or that results in personal gain or advantage to the official or employee or to preferred other persons.
(2) COVERED FUNDS.--The term "covered funds" means any contract, grant, or other payment received by any non-Federal employer if--

(A) the Federal Government provides any portion of the money or property that is provided, requested, or demanded; and
(B) at least some of the funds are appropriated or otherwise made available by this Act.

(3) EMPLOYEE.--The term "employee"--

(A) except as provided under subparagraph (B), means an individual performing services on behalf of an employer; and
(B) does not include any Federal employee or member of the uniformed services (as that term is defined in section 101(a)(5) of title 10, United States Code).

(4) NON-FEDERAL EMPLOYER.--The term "non-Federal employer"--

(A) means any employer--

(i) with respect to covered funds--

(I) the contractor, subcontractor, grantee, or recipient, as the case may be, if the contractor, subcontractor, grantee, or recipient is an employer; and
(II) any professional membership organization, certification or other professional body, any agent or licensee of the Federal government, or any person acting directly or indirectly in the interest of an employer receiving covered funds; or

(ii) with respect to covered funds received by a State or local government, the State or local government receiving the funds and any contractor or subcontractor of the State or local government; and

(B) does not mean any department, agency, or other entity of the Federal Government.

(5) STATE OR LOCAL GOVERNMENT.--The term "State or local government" means--

(A) the government of each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands, the Commonwealth of the Northern Mariana Islands, or any other territory or possession of the United States; or
(B) the government of any political subdivision of a government listed in subparagraph (A).
SEC. 1554. SPECIAL CONTRACTING PROVISIONS.

To the maximum extent possible, contracts funded under this Act shall be awarded as fixed-price contracts through the use of competitive procedures. A summary of any contract awarded with such funds that is not fixed-price and not awarded using competitive procedures shall be posted in a special section of the website established in section 1526.

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Updated: 12/11/2013
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