For Immediate Release - October 07, 2010

Attorney General Martha Coakley Sues Pittsfield Construction Company for Contracting Fraud

Pittsfield Contractor Falsely Certified Compliance to Government Agencies to Use Minority- and Woman-Owned Subcontractors

SPRINGFIELD- Attorney General Martha Coakley filed a lawsuit against Petricca Construction Company, a Pittsfield contractor, for fraudulently obtaining contracts and falsely certifying compliance with contracts that required the participation of State Office of Minority and Women Business Assistance (SOMWBA) approved minority- and woman-owned businesses on nine public construction projects. The complaint alleges that Petricca filed approximately 184 fraudulent certifications of compliance from the years 2004-2008 and fell nearly $600,000 short of its commitment. AG Coakley's office learned of the fraudulent conduct from a whistleblower, a minority contractor who had been cut out of work by Petricca, the complaint alleges.

"A contractor that wins contracts based on false pretenses puts honest contractors at an unfair competitive disadvantage," AG Coakley said. "Causing the government to pay out funds based on false representations is a breach of the public trust subject to stiff penalties under the False Claims Act."

The complaint, filed in Hampden Superior Court, alleges that Petricca violated the Massachusetts False Claims Act by submitting bids for the projects that required Petricca to use minority- and woman-owned businesses for work equal to a certain value of the contract. According to the complaint, Petricca instead used non-minority and non-woman-owned contractors, while repeatedly fraudulently certifying to the Commonwealth that it was complying with the terms of its contract.

Bid specifications for many Massachusetts construction projects require bidders to demonstrate good faith efforts to employ minority- and woman-owned subcontractors to fulfill participation goals. A bid that meets the participation goals is given preference in the bidding process. If the contractor's bid is successful, the contractor is required to comply with the terms of its bid in completing the project, or seek a waiver of compliance. When it requests payment from the government throughout the course of the project, a contractor certifies that it has complied with the terms of the contract.

According to the complaint, on one of the nine projects, Petricca submitted a bid, in the amount of $607,750.50, for construction of a water tank in Adams. Petricca represented that it would use Larry's Trucking, a minority-owned sub-contractor, to perform 225.01 hours of trucking at a unit price of $80 per hour. The complaint alleges Petricca only used Larry's Trucking for eight of the required 225.01 hours. Instead, Petricca paid non-minority trucking companies $65/hour for trucking, while cutting Larry's Trucking out of the work, but paying Larry's Trucking $15 for each hour of trucking performed by a non-minority business. The complaint alleges that Larry's Trucking performed no commercially useful function to earn the $15 per hour. Upon completion of the project, Petricca falsely certified to the Commonwealth that Larry's Trucking had performed work valued at, and was paid, $44,785.01.

The complaint was initially filed by Larry's Trucking as a whistleblower, called a "relator" under the False Claims Act. The statute allows an individual to file a lawsuit on behalf of the Commonwealth against government contractors for fraud against the government. AG Coakley's Office intervened and assumed control of the false claims action filed on the Commonwealth's behalf by Larry's Trucking. The complaint, filed by Larry's Trucking, alerted the Attorney General's Office to the violations. AG Coakley's office conducted its own investigation of Petricca, resulting in the Attorney General's amended complaint.

This matter is being handled by Assistant Attorney General Jonathan Engel, of AG Coakley's Public Protection and Advocacy Bureau.