Tollway awards contract to firm despite past issues

Illinois tollway leaders approved a $64 million contract Thursday with a construction firm that previously drew the ire of federal prosecutors who accused the company of falsifying paperwork regarding minority contractors.

In 2012, Judlau Contracting Inc. reached a $7.5 million settlement with the U.S. attorney's office in New York, which filed a civil complaint against the firm and its joint venture partners.

New York-based Judlau, which opened offices in Lisle recently, was building a tunnel into New York's Grand Central Station for the Metropolitan Transportation Authority in the 2000s.

Between 2006 and 2008, prosecutors said, the firm pretended to subcontract work to disadvantaged business enterprises when in fact the work was performed by non-disadvantaged businesses. Disadvantaged business enterprises are typically owned by minorities or women.

In the 2012 settlement, Judlau and its joint venture partners admitted they submitted reports about payments to certain disadvantaged businesses in cases when the businesses were not qualified to receive credits as DBEs.

"There was no fraud here," Judlau Vice President Cesar Pereira said. He said problems were uncovered during an audit by the joint venture and reported to authorities subsequently, Pereira said.

Tollway Chief Engineer Paul Kovacs said the firm has been vetted by the state of Illinois and is qualified to conduct business with government agencies. Judlau was the lowest bidder on the project, Kovacs said.

"The tollway has strong policies and procedures in place to protect us from misconduct. We do know the team of subcontractors Judlau has assembled, the vast majority has worked on tollway projects before," Kovacs said.

The contract to build the interchange connecting I-290 with the expanded Elgin-O'Hare Expressway is Judlau's first in Illinois, Pereira said. "We're excited about working for the tollway. We want to expand in the state."

To receive federal funds for transportation projects, construction firms must hire a percentage of disadvantaged businesses as subcontractors. Prosecutors claimed Judlau, its partner Dragados USA, and their joint venture Dragados/Judlau, reported giving $17 million to DBE firms when less than $5 million was paid.