Richmond Company Agrees to Settle False Claims Act Lawsuit

RICHMOND, Va. – James River Air Conditioning Company, located in Richmond, has agreed to pay $625,000 to the United States to settle a federal civil fraud lawsuit alleging that it underpaid its workers and submitted false certified payroll reports for work it performed on federal construction and renovation projects.

James River subcontracted to perform plumbing, heating, ventilation and air conditioning (HVAC) work on seven separate federal renovation and construction projects located in and around the Richmond area. The Davis-Bacon Act, together with the Contract Work Hours and Safety Standards Act, requires that contractors on federal projects submit weekly payroll reports certifying that they correctly classified their workers according to work actually performed and that workers be paid not less than prevailing wages and benefits for each classification, as determined by the U.S. Department of Labor. The United States initiated an investigation after a qui tam (or whistleblower) lawsuit was filed under the federal False Claims Act.

The False Claims Act permits the government time to investigate allegations in qui tam complaints and to intervene in such lawsuits. Based on its investigation of the allegations, the United States intervened, the case was unsealed and the Government filed a complaint. The alleged conduct occurred between 2012 and 2015.

The False Claims Act also permits whistleblowers to receive a share of any recovery. The whistleblower in this case will receive $106,250 from the settlement. The case is captioned United States ex rel. Nathan Kirchgessner v. James River Air Conditioning Company, Civil No. 3:16-cv-232 (JAG).

The resolutions obtained in this matter were the result of a coordinated effort between the U.S. Attorney's Office for the Eastern District of Virginia, the Department of Labor Office of Inspector General, the Army Criminal Investigation Command, Department of Defense Criminal Investigative Service, and the Department of Veterans Affairs Office of Inspector General.

The matter was investigated by Assistant U.S. Attorney Robert McIntosh. The civil claims settled by this False Claims Act agreement are allegations only; there has been no determination of civil liability.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.