Contractor with Haverhill Ties Settles State Inflated Payment Claims

Maura Healey

Massachusetts Attorney General Maura Healey.

A New Hampshire general contractor with Haverhill ties and a subcontractor have agreed to pay more than $420,000 for submitting “false and inflated payment requests” in connection with construction of Assembly Square Station on the MBTA’s Orange Line in Somerville, Attorney General Maura Healey said Friday.

S&R Construction Enterprises, its president Stephen Early, subcontractor A&S Electrical and its manager Gregory Lane settled allegations they violated the Massachusetts False Claims Act by knowingly submitting false and inflated pay estimates to improperly front load payments under their contracts. In addition, S&R Construction and A&S Electrical are barred from bidding on and accepting new public contracts in Massachusetts for five years and one year, respectively.

“Building new public transportation infrastructure is how we will move Massachusetts forward, and taxpayers deserve confidence in how we spend every dollar,” said Healey. “Overbilling and front-loading creates unacceptable risks of delays and degrades the integrity of our public contracting. Taking on this fraud is a top priority.”

S&R Construction Enterprises is registered with the Massachusetts Secretary of State as a foreign corporation. Its president is listed as Stephen P. Early, 353 South Main St., Bradford.

Healey’s office investigated the matter following a referral by the Inspector General’s Office which received a tip that A&S Electrical requested inflated invoices from one of his subcontractors.

“This is a solid example of how a call to our fraud hotline led to a joint investigation by the AGO and our office resulting in significant recovery for the taxpayers,” said Massachusetts Inspector General Glenn A. Cunha.

The Commonwealth’s complaint alleges that S&R Construction and A&S Electrical violated the Massachusetts False Claims Act by knowingly submitting to the MBTA false and inflated requests for payment reflecting that they had purchased construction materials in greater quantities or at higher prices than they had actually purchased, in order to receive larger payments than they were entitled to at the time under the lump sum contract.

Under the terms of the consent judgments entered Thursday in Suffolk Superior Court, S&R Construction and A&S Electrical admitted there were sufficient facts to support a finding that they submitted inflated requests for payment to the MBTA. The settlements require the defendants to pay more than $420,000 to resolve the allegations, including at least $110,000 in civil penalties.

S&R Construction was cited by the AG’s Office for its failure to pay the prevailing wage and failure to submit true and accurate time records on both the construction of the Assembly Square Station and the construction of the Wachusett Commuter Rail Station on the Fitchburg Line. The citations require S&R Construction to pay more than $40,000 in restitution to its employees and more than $25,000 in penalties.

6 thoughts on “Contractor with Haverhill Ties Settles State Inflated Payment Claims

  1. “S&R Construction Enterprises is registered with the Massachusetts Secretary of State as a foreign corporation. Its president is listed as Stephen P. Early, 353 South Main St., Bradford.”

    WHAT ? …a foreign corporation but all of it’s offices and equipment are just over the border ? Interesting as to why ? And why are Mass companies NOT given preference on these projects or American companies for that matter ???

    • To correct my above comment. It seems that the state of Ma. considers ANY out of state business a “foreign” business. I had no idea that is how they categorize them. Therefore no foul here and I apologize for thinking they was an issue here.

      • As someone who worked in the biz, most companies file in Delaware because they have the shortest Statute of Limitations. For folks trying to hide stuff, Nevada is the best place, they don’t ask any questions. If you want to launder money, right here in Massachusetts is best as nominee trusts are opaque and even more so when you can name an LLC as the beneficiary. It’s all perfectly legal too, the state legislature voted as much in mid/late 2000’s. Further irony? My former firm was part of The Panama Papers, but once again, completely legal here, the super-wealthy paid well for the privilege.

        https://offshoreleaks.icij.org/nodes/293360