Menomonee Falls Construction firm Pleads Guilty to Using Foreign Materials on Federally Funded Projects

A Menomonee Falls design and construction firm has agreed to enter a guilty plea and pay $3 million to the Department of Justice for using foreign materials on projects involving federal funds.

This use was in violation of contractual provisions implementing various domestic preference statues, often referred to colloquially as the “Buy America” requirements.

Novum specializes in the design and construction of glass space frame often used in roofs and atrium enclosures.

The company was accused of repackaging materials and falsifying documents relating to some federally funded construction projects in order to hide that it was using noncompliant foreign materials.

Domestic preference statutes are designed to promote American businesses and to protect U.S. economic interests,” said Acting U.S. Attorney Gregory J. Haanstad for the Eastern District of Wisconsin.  “When companies subvert those interests by violating ‘Buy American’ provisions – and when they undertake efforts to conceal that they have done so – all in an effort to improperly advance their own private financial interests, the U.S. Attorney’s Office will pursue all appropriate criminal and civil sanctions.”

In addition to the criminal fine, Novum has agreed to pay $2.5 million to resolve civil allegations under the False Claims Act that its conduct caused the submission of false claims for payment.  Specifically, the civil settlement resolves allegations that Novum caused false claims by knowingly – and in violation of its contractual obligations – using noncompliant foreign materials on several federally funded construction projects from Jan. 1, 2004 through July 11, 2013.

Construction projects funded by the U.S. government are generally subject to laws requiring the use of domestic materials, such as the Buy American Act; the Federal Transit Administration’s Buy America provision; and § 1605 of the American Recovery and Reinvestment Act.  The contracts involved in this case covered both government buildings and transit projects partially paid for with federal funds.