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Why would you sign as Dave Nelson when your not THE Dave Nelson? FOR IMMEDIATE RELEASE CIV FRIDAY, SEPTEMBER 29, 1995 (202) 616-2765 TDD (202) 514-1888 CSX PAYS U.S. $5.9 MILLION TO SETTLE MISCHARGING CLAIMS WASHINGTON, D.C. -- CSX Transportation Inc. will pay the United States $5.9 million to settle claims the company overcharged the government millions of dollars for railroad crossing signals installed under a federal safety program, the Department of Justice announced today. Assistant Attorney General Frank W. Hunger, in charge of the Civil Division, said the agreement settles claims that CSX Transportation inflated labor hours for wiring signal houses; failed to obtain the lowest price possible from third-party vendors for parts; and overcharged for certain parts by selling them at a profit to third-party vendors, then repurchased the parts and charged the United States the higher repurchase price. Funds for the railroad signal crossing equipment, which were installed primarily in southeastern states, were provided under the Rail Highways Crossing Program administered by the Federal-Aid Highway Program of the Department of Transportation. The federal government provides 90 percent of the money for the program with the states providing 10 percent in matching funds. Hunger said A. David Nelson, a former employee of CSX Transportation, brought the matter to the government's attention in February 1993, then filed a qui tam suit March 17, 1994, in U.S. District Court in Jacksonville, Florida, under the False Claims Act, 31 U.S.C. 3729. A two-year investigation by the Department of Transportation's Office of Inspector General and Florida Department of Transportation confirmed the allegations. In April 1993, CSX Transportation voluntarily refunded $2.1 million to 18 states as an adjustment to amounts billed for the construction of signals at grade crossings and on January 11, 1995, CSX Transportation agreed to pay Florida and 11 of the 18 states $1.4 million for adjusted costs related to grade crossing signals. In addition to the money CSX Transportation has paid the United States and the states, the company also must absorb all of its expenses, including legal and accounting costs incurred in this matter. The settlement resolves any potential claims by the United States against CSX Transportation under the False Claims Act for fraud and under common law concerning allegations of cost mischarging to the Rail Highways Crossing Program. Pursuant to the False Claims Act, Nelson will receive $1,180,000 of the settlement. ##### 95-520
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