UPDATED: Parking Lot Contractor To Pay $5.6 Million For Failing To Remit Millions in Parking Revenues to MBTA

BOSTON – A firm hired by the Massachusetts Bay Transportation Authority (MBTA) to operate and manage parking lots in Greater Boston will pay $5.6 million to settle allegations that it failed to detect and deter theft of millions of dollars of cash revenue belonging to the MBTA, Attorney General Maura Healey announced today, July 31.

According to the Assurance of Discontinuance, filed today in Suffolk Superior Court, LAZ Parking Limited, LLC has agreed to pay $1.1 million to the Commonwealth to resolve allegations by the AG’s Office that its failure to implement contractually-required revenue controls and auditing tools at 13 MBTA parking lots resulted in the submission of false claims and records and caused significant revenue losses in violation of the Massachusetts False Claims Act and Consumer Protection Act.

LAZ has also agreed to pay the MBTA an additional $4.5 million to settle a May 2017 lawsuit filed by the MBTA claiming LAZ breached its contract.

“LAZ employees skimmed millions of dollars in cash from MBTA parking facilities, robbing the public of funds we need to invest in transportation,” said Healey, in a statement. “Through this settlement, we’re recovering millions of dollars for the state and forcing the company to change its bidding practices.”

“The MBTA is pleased to have reached a resolution that makes the MBTA whole for the losses it sustained,” said MassDOT/MBTA General Counsel John Englander, in a press release. “The MBTA is appreciative of the Attorney General working with us in our efforts to ensure that our private partners are held to their contractual obligations.”

The AG’s Office alleges that LAZ submitted false daily revenue reports and monthly audits and falsely certified monthly invoices to the MBTA due to its failure to properly track or audit revenue collection and usage at the 13 attended lots.

LAZ’s contract with the MBTA was terminated on March 31, 2017 and a new vendor took over.

Today’s settlement also requires LAZ to conduct pre-bid analyses of the feasibility and cost of compliance with key bid requirements, including revenue and auditing requirements, and to affirmatively correct any statements made in connection with a public bid or contract which it learns are untrue.

After review by third party auditors, and on mutual agreement with the MBTA, LAZ acknowledges the alleged theft by three dishonest employees at a limited number of these parking lots. Once the loss was discovered, we acted swiftly to identify and immediately terminate those allegedly responsible. Throughout this process we have been diligent, fully engaged and cooperative with the authorities involved to identify the nature and extent of the financial loss to the MBTA
“LAZ has accepted our share of any responsibility and we have honored all of the commitments we had made and fully reimbursed the MBTA for the losses which were incurred,” said Laz Parking President and Founder Jeffrey B. Karp.

“For the past 36 years Laz Parking has been built on the core values of respect, commitment to people, honesty and integrity and trust. We are proud to live up to these values and always do the right thing for our clients and customers,” said Karp.

The MBTA fully cooperated with the AG’s investigation into LAZ Parking.

This matter was handled by Assistant Attorneys General Cassandra Arriaza, Jeffrey Walker and Division Chief Gillian Feiner with assistance from Paralegal Megan Lima, all of AG Healey’s False Claims Division and Kevin McCarthy, Chief of AG Healey’s Civil Investigations Division.

 

Framingham Source Editor Susan Petroni

Susan Petroni Framingham Source Editor Email: editor@FraminghamSource.com Phone: 508-315-7176

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