Two Ohio asphalt contractors will pay a combined $30 million to resolve False Claims Act allegations tied to federally funded highway work. Kokosing Materials, Inc. agreed to pay $17.5 million, while Barrett Paving Materials, Inc. will pay $12.5 million to settle claims that they submitted falsified asphalt testing data to the Ohio Department of Transportation. The allegations involved Job Mix Formula testing and required quality control reports on projects that received federal funding.
Authorities alleged the companies copied data from prior submissions instead of performing required mix design testing and submitted false quality control results during active paving operations. The civil settlements also resolve whistleblower claims filed under the False Claims Act's qui tam provisions. The U.S. Department of Transportation Office of Inspector General supported the investigation, underscoring federal oversight of transportation spending.
For insurance claims professionals, the case highlights documentation risk and long-tail exposure tied to public infrastructure projects. Falsified testing records can complicate coverage analysis in construction defect claims, roadway failure losses, and subrogation efforts. Adjusters handling contractor liability, builders risk, or public entity claims should anticipate detailed record reviews and potential parallel regulatory scrutiny when federal funds are involved.
