A Minnesota contractor has agreed to pay $1.3 million to resolve allegations that it falsified asphalt quality reports on dozens of publicly funded infrastructure projects. Anderson Brothers Construction of Brainerd was accused of submitting inaccurate test data tied to 25 contracts spanning roads, airports, and schools across the state.

The claims stem from a 2022 whistleblower lawsuit filed by Kacie Dixon, a former Anderson Brothers employee and bituminous technician, who alleged the company engaged in “systemic and consistent false statements” to regulators over a period of several years. The federal and state governments later joined the suit, which was unsealed last week.

According to the complaint, Dixon witnessed fraudulent practices firsthand — including manipulated asphalt test results and other compliance violations — during her employment from May 2019 through at least August 2022. The lawsuit contends that the company’s practices resulted in the use of “substandard and defective” materials on publicly funded projects.

“Minnesotans expect their hard-earned tax dollars to go to things like roads, bridges, schools and public safety, not into the pockets of corrupt contractors,” said Minnesota Attorney General Keith Ellison in a statement. “My thanks go out to whistleblowers like Kacie Dixon who help us fight fraud.”

The lawsuit claims Anderson Brothers benefited financially from submitting false quality test results, receiving $1.3 million in payments it should not have been eligible for.

“The state of Minnesota paid Anderson Brothers for higher quality asphalt than it, in fact, received,” Ellison’s office said in court documents.

Under the terms of the settlement, nearly $635,000 will go to the state and just under $661,000 to the federal government. As part of the state’s agreement, Anderson Brothers is required to establish a quality control program and will be monitored by the Minnesota Department of Transportation throughout the upcoming construction season.

The company, however, did not admit wrongdoing. In a press release, CEO Terry McFarlin said, “We’re pleased to have resolved the government’s concerns about our past testing protocols through a no-fault agreement.”

McFarlin emphasized the desire to move forward, adding that the deal “lets us avoid the time, distraction and expense of lengthy government litigation and instead focus on taking care of our customers.”

He also downplayed the scope of the allegations relative to the company’s overall operations. “The suit covered about one-half of one percent of the value of the projects we were working on at the time,” he said.

McFarlin further noted that the “settlement does not affect our ability to serve our customers, take on new projects, or achieve our long-term goals.”

Dixon, the whistleblower, is slated to receive over $114,000 from the state portion of the settlement and will also collect additional compensation from the federal government. According to the suit, Dixon repeatedly raised concerns internally, reporting her observations to human resources and even a company owner — but said her complaints were ignored.

She alleged that employees openly acknowledged the financial incentives for “cheating” on quality tests and using lower-grade materials.

The alleged misconduct covered 25 projects, including roadways in Crow Wing, Wadena, Morrison, Cass, and Hubbard counties; airport work near Brainerd, Detroit Lakes, and Pine River; and school projects in Brainerd and Nisswa.

“When fraudulent conduct like this undermines the integrity of highway paving putting the safety of the travelling public at risk, it’s our job … to put an end to it,” said Anthony Licardi of the U.S. Department of Transportation’s Office of the Inspector General.

Anderson Brothers has worked on numerous federal and state-funded contracts since 2017. The settlement aims to ensure tighter oversight moving forward while allowing the company to continue operating under enhanced accountability.

Originally reported by Mike Hughlett in Construction Equipment.