On September 29, 2022, after four days of trial proceedings, the U.S. District Court for the District of South Carolina entered a judgment on a jury verdict totaling $3,496,995 on behalf of PilieroMazza’s client, a government contractor providing construction management services for federal customers (Prime Contractor). Led by trial counsel Matt Feinberg, the jury verdict was the culmination of four years of complex, painstaking work by attorneys in the Firm’s Litigation & Dispute Resolution, Labor & Employment, and Government Contracts practice groups. Commenting on the verdict, Matt stated: “It was a long road, but the jury provided some long-overdue justice to our client. Any PilieroMazza client facing litigation puts a great deal of trust and faith in our team and the civil justice system itself. We’re pleased to deliver a positive jury verdict and won’t stop fighting for our client until every penny is collected.” Visit this link to access Matt’s blog which expands on this topic.
In 2013, the client hired an onsite project manager to lead its federal contract in South Carolina. The project manager earned the trust of the company, and the company received high praise from the government for the construction work performed on the federal contract. However, unbeknownst to the company at the time, the project manager was funneling first-tier subcontracts to a company owned by the project manager’s mother-in-law. The mother-in-law’s company performed no actual work; rather, it acted only as a pass-through entity with second-tier subcontractors performing the construction work. Together, the project manager and their mother-in-law were able to markup the second-tier subcontractors’ work, redirecting millions of dollars into the mother-in-law’s company, substantially cutting into the Prime Contractor’s profit margin. The mother-in-law then transferred some of the funds received through the scheme back to the project manager’s personal bank accounts. As lead counsel Matt Feinberg described in his opening statement and closing argument at trial, it was a “money for nothing” scheme designed to use the client’s trust and goodwill to line the defendants’ pockets.
The misappropriation scheme came to light in 2018 when the Prime Contractor received an anonymous letter alleging the project manager engaged in improprieties with the Prime Contractor’s funds. The company immediately initiated an internal investigation to vet the allegations. PilieroMazza represented the Prime Contractor throughout the company’s internal investigation, assisted in the termination of the project manager and the mother-in-law’s company, coordinated with forensic accountants to investigate and calculate the amount misappropriated from the company, and ultimately navigated the complex financial and legal issues raised in the litigation from inception through jury verdict. The defendants denied all wrongdoing throughout the dispute.
The jury’s verdict included an award of $2.8 Million in compensatory damages against the project manager, the mother-in-law’s company, and a number of co-conspirators; $497,000 in damages for disgorgement of the project manager’s compensation; and $199,995 in punitive damages against the project manager, for a total award of $3,496,995.
About Matt Feinberg
Matt has over a decade of experience in state and federal civil and appellate litigation, as well as in arbitration. As the Practice Group Chair for PilieroMazza’s Litigation & Dispute Resolution Group and Co-Chair of the Firm’s False Claims Act and Audits & Investigations Team, his advocacy for government contractors and commercial businesses on a wide range of topics, across many industries, gives Matt a unique perspective on successful litigation strategies for achieving the best possible outcome for clients. Visit this link to learn more.