Whistleblower Group

February 22, 2016

Pennsylvania-based importers Ameri-Source International Inc., Ameri-Source Specialty Products Inc., Ameri-Source Holdings Inc., their owners, Ajay Goel and Thomas Diener, and the related importer, SMC Machining LLC agreed to pay $3 million to resolve charges they violated the False Claims Act by engaging in a scheme to evade customs duties on imports of small-diameter graphite electrodes from China.  According to the government, Ameri-Source evaded antidumping duties on 15 shipments of the electrodes by misclassifying the size of the electrodes to avoid paying the duties, which do not apply to larger diameter graphite electrodes.  The allegations originated in a whistleblower lawsuit filed by Graphite Electrode Sales Inc. under the qui tam provisions of the False Claims Act.  The company will receive a whistleblower award of approximately $480,000 from the proceeds of the government’s recovery.  Whistleblower Insider

February 22, 2016

Government contractor Paige Industrial Services, Inc. agreed to pay between $450,000 and $675,000 to resolve allegations it violated the False Claims Act by submitting claims falsely certifying it had complied with the Davis-Bacon Act, which requires the payment of certain prevailing wages and fringe benefits to employees working under a government contract.  The work involved construction and maintenance services at the National Institute of Health campus in Bethesda, Maryland.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act.  The unidentified whistleblower will receive a yet-to-be-determine whistleblower award from the proceeds of the government's recovery.  In a related parallel criminal proceeding, Luis Alonso Valle, owner of the Paige subcontractor construction company Valle Services, LLC., pleaded guilty to an illegal pattern and practice of hiring unauthorized aliens.  DOJ(MD)

February 29, 2016

New Jersey announced that two men pleaded guilty to conspiring in a $1.5 million series of thefts involving tractor-trailers loaded with cargo, including clothing, beauty products, auto parts and beer, which the defendants stole and fenced. Seven men pleaded guilty previously to taking part in the theft ring, which operated in New Jersey, New York and Pennsylvania. Between June 2012 and April 2015, ring members engaged in nine thefts and two purchases of additional stolen goods in which the total value of the cargo and tractor-trailers stolen exceeded $1.5 million. NJ

February 17, 2016

New York announced an agreement with Buffalo Biodiesel, a company that collects cooking oil waste and converts it into biodiesel, over claims that the company filed lawsuits against hundreds of small businesses across Western New York and several surrounding states. The over 600 lawsuits, most of which were filed in Buffalo City Court, made various breach of contract claims against small businesses that had entered into a contract with the company. Buffalo Biodiesel sought thousands of dollars, sometimes as much as tens of thousands of dollars, in damages from ‘mom and pop’ restaurants. The agreement requires Buffalo Biodiesel to withdraw all applications it made for default judgments, to vacate default judgments it has taken against unrepresented businesses, and return any money it might have collected on judgments. NY

February 26, 2016

Illinois filed a lawsuit against a Delaware coal company, the American Coal Company, for a coal slurry release near an Illinois mine that resulted in the relocation of at least one resident. The complaint alleges that an injection well located around the village of Raleigh, was leaking unknown quantities of coal slurry, a byproduct of coal preparation. The complaint further alleges the slurry flowed into the nearby Bethel Creek and contaminated soil and groundwater, resulting in at least one resident having to be relocated. IL