CLOSE TIES U.S. DOT is looking into family connections between subs on Boston job. (Photo courtesy of CA/T/Dennis Rahilly)

A nationwide federal investigation into sham disadvantaged businesses has hit Boston’s $14.6-billion Central Artery/Tunnel project. The offices of two demolition firms were searched earlier this month as officials push to uncover fraud schemes.

Agents from the U.S. Transportation Dept.’s Office of the Inspector General on April 1 searched Testa Corp. and PT Corp., both of Lynnfield, Mass. Testa is completing at least $40 million in CA/T subcontracts to demolish the Interstate-93 mainline viaduct and High Bridge over the Charles River.

PT, a sub on $14 million in project demolition work, is owned by Pamela J. Ciampi, sister to Steven Testa, owner of Testa Corp. OIG will not publicly confirm investigations, but in general, material seized is reviewed and could be presented to a federal prosecutor and grand jury for indictment. PT, a state-certified woman business enterprise/disadvantaged business enterprise (WBE/DBE), served as demolition subcontractor on five CA/T projects totaling $44 million. PT "requested to be removed on one $30-million contract in May 2003 and we granted that but [it is] proceeding with the other four," says Michael P. Lewis, CA/T project director.

The $30-million subcontract was part of a $415-million contract held by Modern Continental Construction Co. Inc., Cambridge, Mass. PT withdrew because it could not keep up with an accelerated schedule, sources say. Testa is now completing the work. "Once everything is reviewed, I am confident the federal government will determine that PT Corp. is a legitimate company and a legitimate WBE/DBE," says Tracy A. Miner, a PT and Testa attorney. She says Testa and Ciampi worked in the family business before she started her own. "They’re both eminently qualified," adds Miner.

OIG is now investigating 42 cases in 17 states and territories for DBE fraud. The six-year probe has resulted in 40 indictments, 29 convictions and $10.7 million in fines. A minimum of 10% of DOT funding must be spent on DBE contracting. OIG says the most common DBE schemes involve "false front" firms, pass-through or conduit companies and false eligibility. "There is outright fraud in surface transportation contracts and there are problems with airport concessions," says David Barnes, OIG spokesman.