A New Jersey contractor agreed to settle allegations it violated the U.S. False Claims Act by using shell companies to improperly claim disadvantaged business enterprise credit on a federally funded highway interchange project.

Sewell, N.J.-based C. Abbonizio Contractors Inc. and President Peter Abbonizio agreed to pay $400,000 in restitution as part of an agreement resolving the case brought by the U.S. Attorney’s Office in the state, authorities announced Oct. 25. 

The firm was a subcontractor on Phase 1 of the state Dept. of Transportation I-295/I-76/Route 42 interchange project in Camden County under a $159.9-million contract awarded to Newtown, Pa.-based PKF-Mark III Inc. in 2013, records show. PKF signed a $39.1-million subcontract with C. Abbonizio the next month for earthwork and pipe installation. 

Funded by the 2009 American Recovery and Reinvestment Act, the Phase 1 project involved replacing bridges, building retaining walls, widening roads and building two temporary ramps, records show.

Phase 1 completed in November 2016. Phase 2 work started in June 2014 and completed in July 2019. DOT is continuing work today on Phase 3, and Phase 4 is in design. 

PKF’s bid relied on C. Abbonizio’s proposals to use woman- and minority-owned suppliers to reach its 15% DBE requirement on the project, officials said in a complaint filed in U.S. District Court in Camden, N.J. However,the firm had actually arranged with its regular non-DBE suppliers to use pass-through entities, authorities alleged.

The U.S. Attorney did not allege any wrongdoing by PKF in the lawsuit.

C. Abbonizio signed a $3.1-million contract for diesel fuel and lubricants with Sanzo Ltd. of Cranford, N.J., but the fuel actually came from its typical fuel supplier, which put magnetic “Sanzo” signs on its trucks to conceal the scheme. 

C. Abbonizio also signed a $1.6-million contract with Cherry Hill, N.J.-based Multifacet Inc. for castings, reinforced concrete pipe and precast fabrications. Those materials also actually came from C. Abbonizio’s usual suppliers, according to the complaint. Neither pass-through company had involvement in setting prices or delivering materials, authorities alleged.

Vincent Sarubbi, an attorney representing C. Abbonizio, said via email that the settlement did not include any admission of wrongdoing, and noted that the agreement states it was reached to avoid the expense associated with protracted litigation.

While Peter Abbonizio agreed to personally pay $25,000 of the restitution as company president, Sarubbi said a judge had dismissed the case against him in March 2021. Abbonizio’s attorneys did not respond to an inquiry.