Acting United States Attorney Lisa G. Johnston disclosed that Thompson Construction Group Inc., based in Sumter, South Carolina, will pay $191,070 to settle claims accusing the company of violating the federal False Claims Act. The allegations involve submitting false payment claims for federal disaster recovery grants and falsely certifying compliance with housing construction contract conditions.
The issue originated after the 2016 floods in central and southern West Virginia, which led to a presidential disaster declaration and the provision of Community Development Block Grant – Disaster Recovery funds by Congress. These funds were managed by the U.S. Department of Housing and Urban Development (HUD) to support recovery efforts.
Thompson Construction was contracted to rebuild homes damaged by the floods. The contracts stipulated requirements for water management, including the installation of crawl space drainage systems and sump pumps in flood-prone areas. However, investigators found these measures were not implemented despite Thompson Construction's certifications, leading to false claims.
The settlement agreement compels Thompson to pay $95,535 in restitution and another $95,535 as double damages under the False Claims Act.
Acting United States Attorney Lisa G. Johnston stated, “Numerous West Virginia families devastated by the 2016 flooding relied on Thompson Construction, which received significant taxpayer dollars only to leave these families vulnerable to future flooding.” She acknowledged the efforts of HUD-OIG, the West Virginia Commission on Special Investigations, and other partners in investigating and resolving the matter.
Special Agent-in-Charge Shawn Rice of HUD-OIG expressed, “Thompson Construction Group’s actions diverted limited federal taxpayer resources that were intended to help victims rebuild homes that had been damaged by devastating floods and instead used that money to line their pockets.”
Rick Eplin, Director of the Commission on Special Investigations, added, “The Commission on Special Investigations is committed to investigating all matters involving the misappropriation and theft of public funds.” He highlighted the collaboration with federal partners in bringing the case to a successful resolution.
The U.S. Attorney’s Office for the Southern District of West Virginia released the press statement.
