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October 26, 2022

Honeywell International Inc. has agreed to pay $3.35 million to settle a False Claims Act case involving the sale of defective bullet proof vests to the government.  Honeywell allegedly sold its patented Z Shield material to a bullet proof vest manufacturer, even though it knew the material was not cut out for ballistic use.  The vests were ultimately sold to multiple agencies through a GSA contract, as well as various state, local, and tribal law enforcement authorities through a DOJ program.  Their failures launched a 10-year investigation and litigation into the issue that ended with this settlement.  In total, the government recovered over $133 million from 17 entities and individuals.  DOJ

October 14, 2022

Illinois Bell Telephone Company, LLC, d/b/a AT&T Illinois, has agreed to pay $23 million under a deferred prosecution agreement to resolve a bribery investigation.  As part of the resolution, AT&T Illinois admitted that it paid an ally of former Illinois Speaker of the House Michael J. Madigan $22,500 through a lobbying firm to unlawfully influence legislation favorable to the company.  USAO NDIL

September 22, 2022

The operations manager for Zieson Construction Company has been sentenced to 8 years in prison, ordered to forfeit over $4.6 million in profits, and ordered to pay restitution of over $600,000 to the IRS and over $82,000 to the Missouri Department of Revenue for his role in a massive fraud scheme.  Using an African American service-disabled veteran as the nominal owner of Zieson, Patrick Michael Dingle obtained approximately $335 million in federal construction contracts that were set aside for small businesses owned and operated by individuals fitting the nominal owner’s profile.  In violation of program rules, however, Zieson was actually controlled by Dingle and his co-conspirators.  Dingle also separately admitted to filing fraudulent business tax returns from 2013 to 2016.  USAO WDMO

August 30, 2022

Medical device manufacturer Philips North America has agreed to pay $4.2 million to resolve allegations that it violated the False Claims Act by falsely certifying that mobile patient monitoring devices it sold to military purchasers met standards for airworthiness and passed safe-to-fly testing required to ensure that medical devices can safely be used in aircraft.  As part of the settlement, Philips admitted that after receiving initial approval in 2008, it made modifications to the device but did not inform government purchasers of those modifications, so that a determination could be made if re-testing was required.  USAO MA

August 2, 2022

VE Source LLC and its owners, Sherman Barton and Christopher Neary, as well as a related entity, Vertical Source LLC, have together agreed to pay nearly $8 million to resolve claims of violating the False Claims Act.  VE Source had fraudulently obtained more than $16.5 million in contracts with the Department of Agriculture (USDA) and the Defense Logistics Agency (DLA) that were set aside for businesses owned and controlled by service-disabled veterans, which it was not.  USAO NJ

August 2, 2022

VE Source LLC, Sherman Barton, Christopher Neary, and Vertical Source, LLC will collectively pay $7.975 million for violating the False Claims Act by fraudulently procuring government contracts designated for companies owned and controlled by service-disabled veterans. None of the defendants are service-disabled vets, yet they accepted more than $16.5 million from the U.S. Department of Agriculture and the Department of Defense, undercutting the express Congressional purpose of the program. USAO NJ

July 8, 2022

Aerojet Rocketdyne Inc., which provides propulsion and power systems for vehicles belonging to the Department of Defense and NASA, has agreed to pay $9 million to resolve a whistleblower lawsuit.  According to Brian Markus, a former employee, the company misrepresented its compliance with the cybersecurity requirements of contracts with those agencies, in violation of the False Claims Act.  For bringing a successful qui tam case, Markus will receive a relator’s share of $2.61 millionUSAO EDCA

July 1, 2022

Air France and KLM Airlines have agreed to pay $3.9 million to resolve their liability under the False Claims Act.  Under contracts with USPS, the airlines were required to submit scans showing when mail was transferred from their possession, but they submitted scans that falsely reported delivery times.  DOJ

June 30, 2022

Delta Airlines has agreed to pay $10.5 million to resolve allegations that it falsely reported mail delivery times under a contract with USPS in order to avoid penalties for mail delivered late or to the wrong location.  The settlement resolves Delta’s liability under the False Claims Act.  DOJ
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