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MassTech and its CEO and CFO To Pay $1.9 Million To Settle False Claims Act Allegations

Posted  May 4, 2018

By the C|C Whistleblower Lawyer Team

Columbia-based MassTech, Inc., its former Chief Executive Officer, Arnold Lee, and its former Chief Financial Officer, Richard Lee, have agreed to pay the United States $1.9 million to resolve allegations that MassTech falsely certified it was a small business in order to obtain Small Business Innovation Research (SIBR) awards.

The settlement agreement was announced by United States Attorney for the District of Maryland Robert K. Hur; Inspector General for the National Science Foundation, Allison Lerner; Special Agent in Charge for NASA Office of Inspector General, Michael Sonntag; and Special Agent in Charge for the Office of Inspector General for the Department of Health and Human Services, Maureen Dixon.

According to the settlement agreement, the United States alleged that MassTech, Arnold Lee, and Richard Lee falsely represented to NSF, NASA, and HHS that MassTech was an eligible small business at the time of the SBIR application as well as throughout the lifecycle of the award.  As a result, NSF, NASA, and HHS approved and funded SBIR awards to MassTech that MassTech otherwise would not have received.  MassTech, Arnold Lee, and Richard Lee denied the United States’ allegations.      

“Entities that participate in government-funded research grants must truthfully report their eligibility to participate in these programs, including the SBIR program.  Companies and individuals that misrepresent their eligibility in order to obtain government funding undermine the integrity of the government grant process,” said Robert K. Hur, United States Attorney for the District of Maryland.

“The SBIR program is a valuable tool in advancing NSF’s mission to promote the progress of science by increasing opportunities for small businesses to undertake cutting-edge scientific research, and it is essential to protect the integrity of this program,” commented Allison Lerner, the Inspector General for NSF.  “The NSF Office of Inspector General is committed to vigorously pursuing oversight of these taxpayer funds and I commend the U.S. Attorney’s Office and our investigative partners for their strong support in this effort.”

“Individuals who fraudulently obtain federal research funds earmarked for small businesses deprive others of an opportunity to pursue meaningful technological discoveries,” said NASA OIG Special Agent in Charge, Michael Sonntag. “I commend the outstanding efforts of our agents and other law enforcement partners who are committed to ensuring the integrity of this program.”  USAO MD

Tagged in: FCA Federal, Grant and Research Fraud, Set-Asides and Preferences,

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