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September 2, 2021

Jonathan Dean Davis, the owner of for-profit trade school called Retail Ready Career Center, has agreed to forfeit over $72 million after being convicted of defrauding the U.S. Department of Veterans Affairs.  According to evidence presented at trial, Davis falsely certified that he was not personally facing any criminal or civil actions, and that his school was an established, financially-secure educational institution—neither of which were true.  The scheme unraveled after student veterans realized the HVAC training they received at the school was insufficient for entry-level jobs in the industry.  USAO NDTX; subsequent sentencing

Tagged in: Certifications, Criminal Proceedings, Education Fraud, FCA Federal, Government Programs Fraud,

September 1, 2021

The Van Andel Research Institute has agreed to pay $1.1 million to resolve allegations of failing to disclose foreign ties in awards granted by the National Institutes of Health (NIH), in violation of the False Claims Act.  The foreign ties included foreign-sourced research samples and funding by the Chinese government.  In December 2019, the institute settled similar claims for $5.5 million.  With this second settlement, specific conditions have now been imposed on the remainder of the institute’s NIH grants, including a requirement that an executive-level manager personally certify to disclosures until October 2022.  USAO WDMI

Tagged in: Certifications, FCA Federal, Grant and Research Fraud,

August 26, 2021

The owner of jet charter company All in Jets dba JetReady, Seth Bernstein, has agreed to pay $287,055 to resolve allegations that he misappropriated company Paycheck Protection Program loan proceeds for his personal use.  Whistleblower Victoria Hablitzel, a former JetReady employee, reported defendant’s conduct by filing a qui tam action, and will receive a relator’s share of $57,411.  DOJ; USAO SD FL

Tagged in: COVID-19, FCA Federal, Government Loan Programs, Whistleblower Case, Whistleblower Rewards,

August 26, 2021

Nonprofit organization the Florida Coalition Against Domestic Violence, its former CEO Tiffany Carr, and other former officers and directors, have entered into a settlement agreement with the State of Florida to pay $5 million to resolve civil claims arising from the alleged misuse of state grant funds and excessive compensation to Carr.  The entity will be dissolved.  FL

Tagged in: Government Procurement Fraud, Grant and Research Fraud,

August 9, 2021

Ralph Hackett, a fruit broker in California’s Central Valley, will pay $1.255 million to resolve criminal charges and civil claims arising from his role in a crop insurance fraud scheme.  In a guilty plea, Hackett acknowledged that he authorized alterations to business records and misstatements to underreport the table grapes sold by another individual, so that the individual could submit fraudulent crop insurance claims between 2012 and 2015.  Hackett agreed to pay criminal restitution of $650,000 and a civil penalty of $605,000; his prison sentence is yet to be determined.  USAO ED Cal

Tagged in: Criminal Proceedings, Crop Insurance, FCA Federal, FIRREA,

July 28, 2021

Clothing companies Stargate Apparel, Inc. (now known as Excel Apparel Corp.), Rivstar Apparel, Inc. (now defunct), and former CEO and owner Joseph Bailey have agreed to pay a total of $6 million to settle a whistleblower’s allegations that they submitted false claims to U.S. Customs and Border Protection (CBP).  Between 2004 and 2015, Stargate, Rivstar, and Bailey allegedly engaged in two different fraud schemes to avoid paying millions of dollars in customs duties.  Both of the schemes involved submitting separate invoices to the CBP, which underreported the true value of goods being imported into the United States.  USAO SDNY

Tagged in: Customs Fraud, FCA Federal, Whistleblower Case,

June 8, 2021

A North-Carolina-based company, Bio-Adhesive Alliance, Inc., has been ordered to pay nearly $900,000 in restitution for making false statements on grant applications submitted to the Environmental Protection Agency and National Science Foundation.  The false statements about employee roles and eligibility were made to obtain nearly $1.4 million in multiple Small Business Innovative Research (SBIR) and Small Business Technology Transfer (STTR) Program grants.  USAO MDNC

Tagged in: FCA Federal, Grant and Research Fraud,

May 12, 2021

Technology company MobileActive will pay $500,000, and its principal Katrin Verclas will serve two years in prison in civil and criminal resolutions arising from the defendants' scheme to defraud the U.S. State Department's Bureau of Democracy, Human Rights, and Labor ("DRL").  In 2010, MobileActive applied for and was awarded a $1.4 million DRL grant to develop and promote a "mobile security toolkit" for human rights organizations and activists to use in assessing and mitigating risks associated with mobile communications. After claiming $1.2 million in grant funds, Verclas failed to respond to requests for information from the State Department; she has admitted that she failed to comply with grant requirements, and directed the funds to her personal use while concealing the nature of the transactions from MobileActive's bank.  USAO MD

Tagged in: Criminal Proceedings, Grant and Research Fraud,

February 5, 2021

Michael Malone, the founder and former executive director of the St. Louis College Prep Charter School, was sentenced to one year in prison and ordered to pay restitution of $2.4 million, following his guilty plea to charges arising from a fraudulent scheme to obtain education funds from the Sate of Missouri by inflating the school’s average daily attendance in reports to the state and falsely claiming regular school days and hours as summer school or remedial hours.  USAO ED MO

Tagged in: Criminal Proceedings, Education Fraud,

December 10, 2020

Four affiliated jewelry importing companies – Roman & Sunstone LLC; ISTAR Jewelry LLC; Ansun Inc.; and Starkes Gems Inc. – agreed to pay $866,068 to resolve claims made in an action brought by a whistleblower under the False Claims Act that they evaded customs on earrings imported from China by misrepresenting the quantity imported.  The whistleblower will receive an award of approximately $152,000.  USAO MA

Tagged in: Customs Fraud, FCA Federal, Whistleblower Case, Whistleblower Rewards,

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