Red River contractor pays $1.8M to settle flood project allegations

An East Grand Forks, Minn., contractor will pay $1.8 million to settle allegations it made false statements to land a flood control contract.

The federal government makes some work available only to socially or economically disadvantaged businesses. The R.J. Zavoral & Sons construction firm signed a joint venture with one of those businesses, Ed's Construction, owned by an American Indian from Cass Lake, Minn.

Zavoral, however, misled federal officials about the project, said Assistant U.S. Attorney David Fuller. The federal case alleged Zavoral did most of the work, meaning Ed's Construction did not benefit from the federal program to aid disadvantaged businesses.

"The concept is that there was a harm done to the government in the sense of a harm to the integrity of this important government program," Fuller said.

The allegations were related to the Heartsville Coulee Diversion construction contract for flood control work in and around East Grand Forks, mainly between 2004 and 2008, the Justice Department said in a statement Tuesday announcing the settlement.

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