Archive

May 7, 2019

The owners of a Colorado biomass power plant agreed to pay $2.6 million to settle allegations concerning fraud impacting the U.S. Treasury’s “1603 Program,” which reimburses companies up to 30%, in lieu of tax credits, for placing renewable energy properties into service. The company at the center of the fraud, Eagle Valley Clean Energy, allegedly applied for and received a 30% advance on a fee it was to pay co-defendant Evergreen Clean Energy, LLC for unspecified development services. Eagle Valley wrote off the fee but failed to return the advance to the U.S. Treasury. As part of the settlement, Eagle Valley paid $2.4 million, and the two owners of Eagle Valley, Evergreen, and parent company Evergreen Clean Energy Corporation—Dean Rostrom and Kendric Wait—paid $125,000 each. USAO CO

April 9, 2019

Univar USA, Inc. has agreed to pay $62.5 million to settle claims that it engaged in unlawful transshipment of saccharin manufactured in China in order to evade antidumping duties.  Univar purchased the saccharin from a supplier in Taiwan, but was alleged to be grossly negligent or negligent in failing to identify that the Taiwan-based company was not the manufacturer, but simply had imported the saccharin from China for transshipment to the U.S.  Univar allegedly evaded $36 million in antidumping duties.  DOJ

March 25, 2019

Duke University agreed to pay $112.5 million to resolve a whistleblower case under the False Claims Act alleging that between 2006 and 2018, the university submitted claims for millions of dollars in funding under 30 different grants from the National Institutes of Health and Environmental Protection Agency that contained falsified or fabricated data or statements.  According to the U.S., in seeking funding from government entities, Duke misrepresented research conducted on mice in its Airway Physiology Laboratory, as well as the results of that research.  The whistleblower, Joseph Thomas, a former Duke employee, will receive $33.75 million from the settlement.  DOJ

March 21, 2019

The University of Wisconsin-Madison has agreed to pay $1.5 million to settle allegations that it violated the False Claims Act in connection with federal grants used to fund engineering, healthcare, and scientific research. According to the DOJ, the university failed to credit the government for discounts and rebates it received on purchases, as it was required to do under award rules. USAO WDWI

March 14, 2019

Former loan broker Loren Young Park pleaded guilty to bank fraud in connection with a scheme to obtain Section 7(a) loans guaranteed by the Small Business Administration loans on behalf of applicants who did not qualify for the loans.  Park and co-defendants submitted fraudulent documents in support of the loan applications, charged undisclosed fees, and failed to disclose interests they had in some of the applicants or their funding.  Park's plea agreement provides for a nine year prison sentence.  USAO MD; USAO MD re: sentencing

February 20, 2019

New York City will pay $5.3 million to resolve claims that the city sought FEMA recovery funds for certain city-owned vehicles claimed to have been damaged during Superstorm Sandy.  However, the city provided inadequate training to officials regarding the identification of vehicles damaged as a result of the storm, and officials made no effort to inspect the vehicles or determine whether the claimed damage was, in fact, a result of Sandy.  Many of the vehicles for which the city sought full replacement costs had been nonoperational prior to the storm.  USAO SDNY

February 11, 2019

North Greenville University (NGU) in South Carolina has agreed to pay $2.5 million to settle claims that it violated Title IV of the Higher Education Act, as well as the False Claims Act, by improperly compensating student recruiters with bonuses while receiving federal student aid. The alleged fraud was exposed by Maurice Shoe, co-owner of a recruiting company partially owned by NGU; Shoe will now receive $375,000 of the government’s recovery. DOJ

January 31, 2019

The University of Texas Health Science Center (UTHSC) at Houston paid $2,396,769.76 to resolve allegations that its Human Genetics Center misappropriated grant funds the NIH provided for research related to the impact of genomic variation on individual health and the health of families and populations. The government began its investigation after receiving a tip that the Genetics Center had misappropriated funds to avoid returning unused funds to the NIH. DOJ

January 30, 2019

Laserlith Corporation, Black Hills Nanosystems Corporation, Blue Sky Engineering Inc., along with several corporate representatives, have paid $1.1 million in criminal restitution for making false statements in applications for loans from programs run by NASA, the National Science Foundation, and the Department of Energy.  Between 2012 and 2016, the companies sought funding through the agencies' Small Business Innovation Research Program and Small Business Transfer Technology Research Program, but misrepresented their status as related corporations sharing facilities and performing essentially equivalent work.  DOJ

January 29, 2019

E.M. Photonics, Inc. (“EMP”) and its Chief Executive Officer, Eric Kelmelis, will pay $2.75 million to resolve allegations that they violated the False Claims Act by seeking disbursements from federal agencies for falsified labor costs and duplicative work in order to maximize charges to contracts awarded by federal agencies. From January 2009 to April 2014, EMP received funds under seven different contracts and grants awarded through the federal Small Business Innovation (“SBIR”) and Small Business Technology Transfer (“STTR”) programs. EMP and Kelmelis directed EMP employees, or caused others to direct EMP employees, to complete false timesheets and submit false invoices and public vouchers for direct labor that did not occur. EMP and Kelmelis also sought and received SBIR/STTR funding for work already performed and funded by another government agency and falsely certified that such work was, in fact, non-duplicative. The government alleged that both of these schemes were designed to maximize charges to each contract or grant. DOJ