Hartford’s LAZ Parking Limited LLC has paid $5.6 million to settle allegations it failed to detect and deter millions of dollars in theft by three of its employees from the Massachusetts Bay Transportation Authority (MBTA), the company and authorities say.
LAZ agreed to pay $1.1 million to resolve allegations by Massachusetts Attorney General Maura Healey that it failed to implement contractually required revenue controls and auditing tools at 13 MBTA parking lots.
LAZ also agreed to pay the MBTA an additional $4.5 million to settle a May 2017 lawsuit in which the MBTA claimed the company breached its contract.
LAZ has fully reimbursed the MBTA for its losses, President and Co-founder Jeff Karp said in an email Tuesday.
Settlement documents were filed Monday in Suffolk Superior Court. According to Healey, the allegations stem from LAZ parking employees skimming “millions of dollars in cash from MBTA parking facilities.”
The problem allegedly resulted in the submission of false claims and records and caused revenue losses in violation of the Massachusetts False Claims Act and Consumer Protection Act, Healey said.
“Through this settlement, we’re recovering millions of dollars for the state and forcing the company to change its bidding practices,” Healey said.
Healey had alleged 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 has accepted its share of responsibility for the actions of its workers, Karp said.
“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,” he said. “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.”
The 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, Healey said.
LAZ’s contract with the MBTA was terminated on March 31, 2017 and a new vendor took over.
“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,” Karp said.
LAZ owns or operates hundreds of thousands of parking slots in more than 2,500 locations.
