Bovis Lend Lease has agreed to pay the New York Department of Investigation (DOI) a settlement of US$ 5 million to compensate for overcharging in more than 100 city-funded construction projects between 1999 and 2009.
During an investigation which began in June last year, the DOI found that Bovis paid some foremen overtime and extra pay for which they had not worked, passing those expenses on to the city.
DOI commissioner Rose Gill Hearn said the settlement shone a light on a practise which drove up costs for the city.
"With this payment, Bovis restores money that was overcharged to the taxpayers and recognises that in dealing with the city, honesty must be the only acceptable policy. In this and other cases DOI will continue to recoup money that rightly belongs to the City," Ms Rose said.
The DOI added that the settlement resolved potential civil claims for the overcharges made by Bovis, a New York-based subsidiary of Australian contractor Lend Lease.
Bovis said it had not admitted liability in agreeing to settle.
Meanwhile, investigations by the US Attorney's Office for the Eastern District of New York and the New York County District Attorney's Office remain ongoing, according to Bovis.