Facing Charges, Biggest 'Big Dig' Contractor Files Chapter 11
News outlets in Boston reported Monday that Modern Continental Corp. of Cambridge, Mass., the largest construction contractor on the $15 billion Central Artery/Tunnel project (known as the Big Dig), filed a Chapter 11 bankruptcy petition earlier in the day after being criminally charged June 20 in federal court with wire fraud, making false statements in connection with its execution of construction documents certifying the quality of its work, and submitting false time and materials slips on contracts. Michael J. Sullivan, U.S. attorney for Massachusetts; Theodore L. Doherty III, special agent in charge of the U.S. Department of Transportation inspector general's office in New England; Warren T. Bamford, FBI special agent in charge in Boston; and Gordon Heddell, the U.S. Labor Department's inspector general, announced the charges.
The government claims MCC made false statements about the quality of construction work it performed on two contracts -- one for construction of a tunnel and another for the finish work in a second tunnel. MCC knowingly executed documents stating the two contracts were built in accordance with the contract documents and procedures, "when in fact MCC was aware that it had not built the contracts in accordance with those documents and procedures," according to the release from Sullivan's office, which said a slurry wall panel failed on Sept. 15, 2004, and on July 10, 2006, a ceiling section installed by MCC in the second tunnel fell and killed a passenger in a vehicle passing through the tunnel. This resulted from failed epoxy anchors MCC used throughout the tunnel and realized far earlier, in December 1999, were "not appropriate for long-term loads such as the ceiling," the release states. The changes expose MCC to criminal fines up to $500,000 and far more in potential restitution.
The government also alleges MCC over-billing the Central Artery/Tunnel Project by falsely categorizing apprentice workers as journeyman on various contracts. The Boston Globe reported Monday that MCC earned $3.2 billion for its work on the Big Dig but is still trying to win $20 million it claims is owed to it by the state. In its bankruptcy filing, MCC claimed it is facing up to $1 billion in debts, the newspaper reported.