Feds: MN Paving Firm Faked Test Results, Owes $1.3M

MINNEAPOLIS, MN — A Brainerd-based construction and paving firm has agreed to pay $1.3 million to settle allegations that it “routinely and knowingly” falsified test results to make its paving materials appear higher quality than they were, according to federal authorities.

The settlement follows allegations by the U.S. government and the State of Minnesota that Anderson Brothers Construction Company of Brainerd LLC violated both federal and state False Claims Acts between 2017 and 2022.

Of the $1,295,610 civil settlement, the U.S. government will receive $660,761, and the State of Minnesota will receive $634,849.

The case began with a whistleblower complaint filed by Kacie Dixon, a former technician at Anderson Brothers, under a federal law that allows private citizens to report fraud against the government and potentially receive a share of any money recovered.

“Protecting taxpayer dollars from fraud and abuse is one of our top priorities,” said Acting U.S. Attorney for the District of Minnesota Lisa D. Kirkpatrick in a statement.

“The submission of false claims for federally funded government contracts will not be tolerated. This settlement should serve as proof that we will actively investigate this conduct whenever it occurs and will hold to account any company that fails to bill accurately for the products provided.”

As a condition of payment for federally funded road paving contracts, Anderson Brothers was required to perform certain quality tests of its paving material and submit the results to the government.

Anderson Brothers falsified the results and submitted them to the government to receive financial incentives for superior quality paving material and avoid deductions for lower-quality material, prosecutors said.

As a result of those false test results, the U.S. government funded Anderson Brothers for unearned incentives, and Anderson Brothers avoided financial deductions that would have occurred had Anderson Brothers submitted truthful test results, according to authorities.

"Today’s settlement reinforces the fact that companies doing business with the government must fully comply with federal regulations and contractual obligations," said Special Agent in Charge Anthony Licari, Department of Transportation Office of Inspector General, Midwestern Region.

"When fraudulent conduct like this undermines the integrity of highway paving putting the safety of the travelling public at risk, it’s our job, together with our law enforcement and prosecutorial partners, to put an end to it."

The settlement was the result of a joint investigation by the U.S. Department of Justice, the U.S. Attorney’s Office in Minnesota, and the Office of Inspector General for the U.S. Department of Transportation. The Minnesota Attorney General’s Office and the state’s Department of Transportation also assisted in the case.

The investigation was led by federal attorneys Danielle Rowan, David Fuller, and Adam Hoskins.