Misrepresentation of Construction Quality Leads to Jail Time and a $700,000 Settlement

Misrepresentation of Construction Quality Leads to Jail Time and a $700,000 Settlement

December 11, 2018

Lying about the quality of concrete can result in jail time and a large settlement payment.  In Davidheiser v. Universal Concrete Prods. Corp., No. 1:16-cv-00316, a whistleblower, who worked as a lab technician for Universal Concrete Products Corporation ("Universal Concrete"), accused Universal Concrete and his former quality control manager of falsifying concrete quality data and providing concrete for a Washington D.C. rail project that did not meet contract specifications.  In a related criminal case, the quality control manager pled guilty to a criminal fraud conspiracy charge, which resulted in a prison sentence of a year and a day, and agreed to a $700,000 settlement.  See U.S. v. Nolan, No. 1:18-cr-00292.  Both cases are pending in the U.S. District Court for the Eastern District of Virginia.

Universal Concrete provided 1,500 concrete panels for a Washington D.C. rail project as a subcontractor.  Universal Concrete agreed that the concrete would contain a certain percentage of air.  An insufficient amount of air exposes concrete to water during temperature changes, which may cause cracks and structural issues.  Universal Concrete’s quality control manager recorded false test results—and instructed employees to do the same—to conceal the fact that the concrete did not contain the amount of air required under the contract.  A whistleblower warned his manager about the substandard concrete, but his warnings were ignored and the manager allowed the concrete to be used for the project.  As a result, all of the concrete panels used on the rail project may be defective.

In addition to jail time and a large settlement for the quality control manager, the general contractor for the project agreed to apply sealant on the faulty concrete panels every 10 years to prevent water and salt penetration.  Overall, this case serves as a reminder as to the importance accurately reporting all testing and compliance with construction specifications.