HD Supply Waterworks settles fraud case for $4.9 million

HD Supply Waterworks has settled allegations it was involved in a scheme to defraud the federal Disadvantaged Business Enterprise program, the U.S. Department of Transportation said Friday.

The Atlanta-based company, the nation’s largest supplier of water, sewer, fire protection and storm drain products, agreed to pay $4.9 million under the civil False Claims Act, DOT said.

The department said contractors reported to authorities that they were using a defunct disadvantaged business — American Indian Builders & Suppliers — as a subcontractor on federally funded projects. Instead, they were obtaining supplies from Waterworks, which would then pass its invoices — along with a mark up — through American Indian Builders & Suppliers to falsely appear that the disadvantaged subcontractor had completed the work.

The DOT said one of the impacted projects was a $6.38 million bridge replacement in Cohoes, N.Y., that had been funded by the American Recovery and Reinvestment Act.

The settlement is the largest of its kind involving a third-party supplier in a Disadvantaged Business Enterprise fraud case, the DOT said.

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