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updated: 5/1/2014 6:24 PM

Feds, state settle with Chicago construction firm

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Associated Press

Illinois and federal officials have announced a $12 million whistle-blower settlement with a Chicago construction company accused of fraudulently securing multimillion-dollar public contracts.

Illinois Attorney General Lisa Madigan and U.S. Attorney Zachary Fardon announced the settlement with James McHugh Construction Co. on Thursday. Investigators say the company wrongly used two subcontractors to do work reserved for women or minority-owned businesses. An investigation found the subcontractors didn't fulfill disadvantaged business enterprises requirements on seven public construction contracts.

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The public projects included Chicago-area roadwork, including on downtown's Wacker Drive and on Chicago Transit Authority train lines.

The company said in a statement that it "recognizes the seriousness of the allegations" but disputes that it intentionally disregarded program requirements. The company says it has new compliance and training policies.

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