Two Major Construction Companies Faces Federal Fraud Inquiries

November 23, 2010 / Elizabeth Buckley, Commercial Property Analyst

The Department of Justice expects to press fraud charges to two major construction companies in the United States. The two major construction companies Schiavone Construction Company from New Jersey and Skanska USA Civil Northeast are under federal investigation.

Two Major Construction Companies Faces Federal Fraud Inquiries

The investigations focuses of the accusations that the two major construction companies used what were basically front companies to avoid requirements, according to the people briefed for the investigation.

The two major construction companies Schiavone Construction Company and Skanska USA Civil Northeast allegedly hired companies licensed by agencies in the government as disadvantaged, or got hold of a definite subcontractor’s percentage owned by women or minorities.

Schiavone Construction Company is under an agreement with government prosecutors in Brooklyn. Investigations with the company are expected to be decided for the next few days, but the company will be paying more than $20 million to avoid criminal charges.

Schiavone is one of the country’s leading tunneling contractors.

Investigations with Skanska USA Civil Northeast are not also far along. The company is expected to resolve the case by paying millions of dollars like Schiavone, according to people knowledgeable with the investigations.

A lawyer from Skanska spoke under anonymity said that the company is cooperating fully with the federal investigations and inquiries.

Skanska is also one of U.S’ leading contractors in various construction categories including general building returns, transportation, and new contracts.

Both the two major construction companies are not filed with any charges. The cases are not made public yet.

The two major construction companies are investigated regarding a few of New York’s biggest public-works projects.

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