Press Release  Rockland Construction Company Settles Claims It Submitted False Payroll Records for Public Playground Projects

A Rockland-based construction company and two of its executives will pay $310,000 in penalties and hire a compliance manager to resolve allegations that they knowingly submitted inaccurate payroll records for the construction of public playgrounds contracted by municipalities in Massachusetts, including Boston, Somerville, Everett, and Needham, Attorney General Maura Healey announced today.

The settlement also resolves allegations that the company knowingly misrepresented the status of furloughed employees to the Department of Unemployment Assistance (DUA) and continued to employ these individuals while failing to pay them the state prevailing wage and overtime.

“This company lied to our state agencies and municipalities and cheated its workers out of the wages they earned while it constructed taxpayer-funded playgrounds for our communities,” AG Healey said. “Companies that do business here have a responsibility to operate with honesty and integrity, and my office will hold accountable those who don’t.”

The settlement agreement resolves an April 2020 qui tam complaint, brought by a whistleblower on behalf of Massachusetts, that alleged NELM Corp, president and treasurer Raymond C. Delmonico, and manager Raymond J. Delmonico violated the Massachusetts False Claims Act and the state’s wage and hour laws when they failed to pay their employees the prevailing wage required for public construction projects, failed to pay overtime rates required by law, and submitted falsified payroll records to the municipalities with whom they had contracted. The workers involved received restitution through a separate private lawsuit that was resolved earlier this year.

According to the settlement, NELM’s contracts with municipalities required the company to pay employees the prevailing wage rate set by the Department of Labor Standards for work on publicly funded projects. The contracts also required NELM to submit weekly payroll reports to municipalities to certify it was paying its employees the prevailing wage. It is alleged that the company regularly submitted reports that falsified both the number of hours that employees worked and the rates they were paid for their work.

In addition to the claims alleged in the qui tam complaint, the AG’s investigation found that NELM routinely represented to the DUA that it had furloughed its employees for various periods of time during these contracts but continued to employ these individuals and pay them from a checking account that was separate from the one it used for its regular payroll expenses in order to conceal the conduct. The AG’s Office alleges the furloughed employees were continuing to work on the public projects and were being paid below the prevailing rate.

Under the terms of the AG’s settlement, NELM will pay a total of $310,000 in penalties and damages to the state – including $280,000 for its violations of the state’s false claims statute and $30,000 in civil citations for its fair labor violations. NELM will also contract with an independent monitor, approved by the AG’s Office, to establish and implement an ethics and compliance program for three years to ensure the company is complying with state laws and regulations. Under the program, the company is required to conduct annual trainings for all personnel on the state’s wage and hour laws. The independent monitor will conduct annual audits of the payroll records the company files with the state.

The False Claims Division was created by AG Healey to safeguard public funds and promote integrity and accountability in public contracting. AG Healey urges anyone with information about suspected fraud or abuse relating to state or municipal contracts or funds to contact the False Claims Division’s tip line at 617-963-2600.

This matter was handled by Assistant Attorney General Sean Hildenbrandt, with assistance from Division Chief Amy Crafts and Paralegal Cara Bradley, all of AG Healey’s False Claims Division, as well as Assistant Attorney General Amy Goyer and Supervising Investigator Greg Reutlinger, both of AG Healey’s Fair Labor Division.

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