WASHINGTON D.C. — An investment group is suing the federal government for $7.8 million, citing allegations that the U.S. Department of Veterans Affairs wrongfully canceled its agreement to build a new health care center in Butler Township.

The AmeriServ Trust and Financial Services Co. of Johnstown, Cambria County, filed the suit in Federal Claims Court, acting as the trustee for the Employee Real Estate Construction Trust Fund, known as the ERECT Fund.

The lawsuit said the ERECT Fund provided a $7.5 million loan to finance a portion of the proposed $67.2 million health care center that was to be built along Route 68, adjacent to the VA campus on New Castle Road.

The VA terminated its agreement with the Westar Development Co., the contractor of the project, in August 2013 after Robert Berryhill, a senior vice president of Westar, was indicted on construction related fraud charges in U.S. District Court in Cleveland. Those charges were not related to the Butler Township project.

ERECT Fund said in the lawsuit that the government knew of the federal investigation involving Berryhill before the trust entered into an agreement with Westar. The lawsuit said had the VA shared that information then “the ERECT Fund would not have made a loan of $7.5 million to the borrower to construct the (health center).”

ERECT Fund also claims that the federal government agreed there would be no defaults under the lease and that the government would not terminate its lease with the developer without 180 days notice and an opportunity to fix the issue, the lawsuit said.

The lawsuit is seeking the $7.5 million for repayment of the loan, as well as costs for unpaid interest and other fees.

The VA announced on Jan. 2 plans to build a new health care center along North Duffy Road in Center Township under a lease with Cambridge Healthcare Solutions PA LP of Vienna, Va.,