A Louisiana shipyard company has agreed to pay more than $1 million to settle a legal dispute in the Eastern District of Louisiana brought by federal prosecutors who alleged the firm used ineligible workers to build fast-response cutters (FRC) for the U.S. Coast Guard.
Bollinger Shipyard LLC, which is based in Lockport, agreed to the settlement agreement with the U.S. Department of Justice on Jan. 14. Bollinger, which manufactures several types of ships for the U.S., allegedly billed the U.S. Coast Guard for labor under FRC contracts without determining through the E-Verify system whether 20 of its employees were eligible to do the work.
E-Verify is an online system run by the Social Security Administration and the U.S. Citizenship and Immigration Service. The system requires employers to verify electronically that their employees are eligible to work in the United States.
“The United States contends from 2015 through 2020, Bollinger knowingly presented false claims to the United States for labor provided by workers who were not eligible to work in the United States in violation of the False Claims Act,” the settlement states.
The settlement requires the company, which is family-owned and operates 11 shipyards located near the Mississippi River and central Gulf of Mexico, to pay $1,025,000 to resolve the dispute. But the claims made by prosecutors remain allegations only, according to the Department of Justice, and the company has admitted no liability for alleged workforce violations.
“It is essential to the safety and operational readiness of our fleet that contractors comply with all contractual requirements,” Brian M. Boynton, principal deputy assistant attorney general and head of the Justice Department’s Civil Division, said in a prepared statement. “We will continue to hold accountable those who knowingly disregard their contractual obligations.”
Each of the parties to the settlement agreed to pay their own attorney costs and legal fees. Shipyard officials did not respond to requests for comment on the settlement.
“The Coast Guard Investigative Service (CGIS) is committed to continually working with all our law enforcement partners to protect and secure taxpayer funds and aggressively act to fully investigate allegations of false claims involving the Coast Guard,” CGIS Assistant Director William Hicks said.
The company, which has been in business since 1946 and oversees dry-docks with a capacity of up to 10,500 tons, has built more than 3,800 vessels during its more than 75 years of operations, according to the company website. These vessels include 181 ships built for the U.S. Coast Guard, among them 54 of the FRC craft.
Bollinger Shipyards also builds U.S. Navy patrol boats, salvage vessels, research vessels, double-hull barges, ships supporting offshore oil development, tugboats and lift boats, according to the company’s website.
Sentinel-class FRC vessels are designed for multiple missions, according to the Coast Guard. These missions include the interdiction of migrants, preventing the importation of illegal drugs, coastal security, patrolling fisheries, search and rescue operations and national defense missions.
Bollinger bills itself as the largest vessel repair business in the Gulf of Mexico area and the largest privately owned shipbuilder in the nation.
Federal officials have said that failures to ensure workers on government contracts are eligible to do the work is a potential threat to U.S. national security.