Colas agrees to pay US government $12.5m over concrete fraud in Djibouti

Colas Djibouti, a subsidiary of French contractor Colas, has agreed to pay $12.5m to the US government after admitting that it supplied substandard concrete for use in airfield construction.

The company was working on US Navy airfields in the east African microstate. As part of the projects, it was required to certify that it supplied concrete with specific composition and performance characteristics. However, it created fictitious test results and made fraudulent representations regarding them.

According to a Department of Justice statement: "In one particularly egregious example, in response to a request for an analysis of the water used in the concrete mix, Colas Djibouti provided an analysis for a store-bought bottle of drinking water.

"As a result of this criminal conduct, Colas Djibouti ultimately supplied substandard concrete to the Department of Navy in Djibouti that could promote early cracking, surface defects, and corrosion of embedded steel, and thus significantly impair the concrete’s long-term durability."

The company will now forfeit $8m, pay another $2m to the Department of Navy in restitution, and pay a monetary penalty of $2.5m.

Thomas Harker, acting navy secretary, commented: "This outcome demonstrates that the Department of the Navy will continue to insist that our contractors must meet our high standards. This global settlement demonstrates the strong cooperation between the Department of the Navy and the Department of Justice in preventing fraud, no matter where in the world it happens."

The case was investigated and prosecuted as part of Africa Strike Force, an initiative by the Major Fraud and Public Corruption Section of the US Attorney’s Office in San Diego, in conjunction with its law enforcement partners from the Defence Criminal Investigative Service, the Naval Criminal Investigative Service, among others.  

The criminal resolution, announced on Wednesday by the US Attorney’s Office for the Southern District of California, was accompanied by the announcement by the Department of Justice’s Civil Division, Commercial Litigation Branch of a simultaneous resolution of allegations of civil wrongdoing, under which Colas Djibouti will pay an additional $1.9m.

Image: Chairman of the Joint Chiefs of Staff US Marine Gen. Peter Pace addresses troops in the "Thunder Dome" at Camp Lemonnier, Djibouti, 2007 (Defense Department photo/Public domain)

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