Thanks to a whistleblower, an Indiana contractor that fraudulently fattened up tests on asphalt content of its roadwork to receive higher compensation is now paying up.
Gohmann Asphalt and Construction Co., Clarksville, Ind., this month paid $6.7 million to the federal government, $1.1 million to Kentucky and $362,165 to Indiana. Gohmann, which didn't admit wrongdoing, was nabbed for manipulating asphalt mixture inspections during some $60 million in work on Interstate 64 near Louisville between 1997 and 2006. "I don't remember anything like this happening around here in the past 15 years," says David Huber, U.S. Attorney for the Western District of Kentucky, which investigated the case.
The agencies say Gohmann engaged in "core-swapping," or manipulating test samples so it could receive maximum payment for surpassing a prenegotiated level of asphalt pave density in its work. Gohmann had to return a $5.3 million bonus paid by Kentucky and the feds in 2001 for early completion of a resurfacing project on I-64. President Richard L. Cripe said in a statement that the firm's "efforts and ethical practices" would allow it to achieve a practical resolution to the claims against it.
The federal settlement includes a $1.1 million payment to whistleblower Paul Roederer, former asphalt crew supervisor for Gohmann until 2002. He now owns his own construction firm. In 2003, Roederer filed a Qui Tam complaint�a provision under the False Claims Act that allows a citizen to bring a lawsuit on behalf of the U.S. "It was a tremendous risk for him," says C. Dean Furman, Reoderer's lawyer. "He's saved the taxpayers millions of dollars." The suit didn't render his client immune from possible prosecution for fraudulent acts at Gohmann, he adds.
Gohmann's work was mostly funded by the Federal Highway Administration, but supervised by the states of Indiana and Kentucky, which analyzed samples of roadwork to test for asphalt pave mixtures. The firm was paid in part based on a formula that took into account the density of asphalt applied to the road-40 percent of its pay for Kentucky projects and 35 percent for Indiana projects. If Gohmann failed to meet an asphalt pave mixture threshold during an inspection of a portion of work, its pay would be reduced for that portion.
To make sure that didn't happen, court documents say Gohmann workers used density gauges manufactured by Troxler Electronic Laboratories to take density readings prior to the extraction of asphalt "cores" for testing. As such, the firm's employees knew which sections of roadwork contained "failing" asphalt and which didn't. So when the state examiners weren't around, Gohmann workers would take additional "good" samples and swap them for samples the employees knew would fail inspection.
Mark Brown, a spokesman for the Kentucky Transportation Cabinet, says testing procedures will be shored up in the future in an attempt to prevent this kind of fraud from happening again.
"We're going to heighten the security of test samples, and we'll also be testing companion samples off site to make sure that the samples we are taking and the ones we are testing are the same," he says.
The U.S. and Indiana say Gohmann engaged in swapping in between 10% and 40% of the inspections over the course of 132 different contracts during the nine-year period. "This kind of fraud makes the job of maintaining infrastructure even more difficult than it already is," says Doug Hexoc, a spokesman for the FHWA. "There are more motorists on the road than ever before. Our highways are taking a beating, and they need to be built correctly."