Robert J. Spagnoletti, Attorney General for the District of Columbia, announced today that the real estate firm Cushman & Wakefield of Washington, DC, Inc, agreed to pay the District of Columbia $4,800,000 to settle claims by the District in connection with a project to renovate District government office space at One Judiciary Square, located at 441 4th Street, NW. The agreement also resolves a dispute regarding work at the District government’s Reeves Center, located at 2000 14th Street, NW. At the same time, Mr. Spagnoletti’s Office filed a lawsuit under the False Claims Act in the DC Superior Court against other companies and individuals for their roles in submitting or approving false claims.
Cushman & Wakefield served as the contractor managing the renovations of the 11-story government building at One Judiciary Square. In an investigation initiated in 2003 by DC Councilmember Jim Graham, then Chairman of the Council’s Subcommittee on Human Rights, Asian, Pacific Island and Latino Affairs, and Property Management, that Subcommittee preliminarily found that the District was overbilled for millions of dollars under a contract for renovations of the One Judiciary Square office space. A subsequent investigation, conducted by the Office of the Attorney General, supported that conclusion.
"There are very few occasions when a contractor returns $4.8 million to the District government. I am pleased that our investigation was such an occasion. The public trust has been vindicated,” said Councilmember Graham.
Although the settlement resolves the dispute with Cushman & Wakefield, it does not resolve allegations against others for their roles in submitting or approving false claims to the District. Under the terms of the settlement, Cushman & Wakefield denied wrongdoing and the Attorney General did not allege that Cushman & Wakefield itself ultimately received funds to which it was not entitled. The real estate company cooperated with the investigation by the Attorney General’s Office and, from the outset, agreed that the District should be made whole. Although Cushman & Wakefield served as the project manager for the renovations at One Judiciary Square, International Builders, Inc. (IBI), a small local business, was responsible for the construction. The president and CEO of IBI, Fernando “Fred” Villegas, is among those now named in the false claims lawsuit by the Attorney General.
Under the District’s civil False Claims Act, anyone involved in submitting fraudulent claims to the District of Columbia government is liable for up to three times the amount of damages, in addition to a civil penalty of up to $10,000 per false claim. Pursuant to that law, Mr. Spagnoletti’s Office is also suing: (1) International Builders, Inc., a subcontractor on the Judiciary Square project, (2) Fernando “Fred” Villegas, the President and CEO of International Builders, Inc. (3) Scott Frankel, a former Cushman & Wakefield executive, and (4) Michael Lorusso, the former Deputy Director of the District’s Office of Property Management. Additional defendants may be named later.
"The District government relies on its contractors to bill accurately and to perform services that are up to standard," said the District’s Attorney General, Robert J. Spagnoletti. "The filing of a lawsuit against others, demonstrates that the District government will not tolerate abuse by its contractors or its employees." According to Mr. Spagnoletti, a false claims case was brought by a private citizen under the Qui Tam or whistleblower provision of the District’s False Claims Act. Under that provision, a private party may file an action on behalf of the District government and, under certain circumstances, receive a portion of the settlement or judgment if the Attorney General takes over the prosecution of the case and reaches a monetary agreement with the defendant or prevails at trial. The law also protects whistleblowers against retaliation by their employers.
Mr. Spagnoletti credited Councilmember Jim Graham and the Subcommittee for its investigation. Mr. Spagnoletti also commended Cushman & Wakefield for its cooperation with the investigation.