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Contract Non-Compliance

This archive displays posts tagged as relevant to fraud arising from or resulting in non-compliance with government contracts. You may also be interested in the following pages:

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Shining a Light on Fraud in the Energy Industry

Posted  10/1/21
This week brought not one but two newly announced False Claims Act (FCA) settlements with companies in the energy sector: (1) An Oklahoma-based energy company settled claims it underpaid royalties for natural resources, and (2) a utility company in New York settled claims it falsified reports to a local power authority to cover up mismanagement and wasted State electricity. The two settlements illustrate federal and...

September 27, 2021

Oklahoma-based Devon Energy Corporation and its affiliates, Devon Energy Corp. and Devon Energy Production Company, LP (collectively, “Devon”) have agreed to pay $6.15 million to resolve allegations under the False Claims Act.  As a lessee of federal land, the oil and natural gas exploration and production company was required to pay royalties on gas found and produced on that land, as well as put the gas in marketable condition on its own dime.  According to the allegations, however, Devon underreported and underpaid royalties to the Department of the Interior by improperly deducting payments made to third-parties, including payments made to put the gas in marketable condition.  USAO CO

DOJ Reasserts the Proper Role for Agency Guidance in Fraud Cases

Posted  09/3/21
Department of Justice Logo
The Justice Department has quietly rescinded a Trump administration policy that was needlessly undermining the role of government agency guidance.  On July 1, 2021, Attorney General Merrick Garland issued a memorandum revoking what is known as the Brand Memo.  In her memo, Former Associate Attorney General Rachel Brand had set out a position that defense attorneys scrambled to use to argue for leniency or...

Catch of the Week: Florida Lab Owner Pleads Guilty to $73 Million Telemedicine Fraud Scheme

Posted  09/3/21
telemedicine doctor on computer with patient
Editor’s Note: For this week’s biggest story, the record $90 million settlement secured by a Constantine Cannon client against Sutter Health, read more here.
Healthcare fraudsters have a track record of exploiting health crises for personal gain. The COVID-19 pandemic created new telemedicine opportunities for patients to receive care without having to see doctors in person. As expected, fraudsters seized on...

Court says that fraudsters who violate rules they later claim are unclear may not violate the False Claims Act

Posted  08/19/21
Red and yellow pills scattered on hundred dollar bills
Last week, the Seventh Circuit Court of Appeals, the federal appellate court for Illinois, Indiana, and Wisconsin decided U.S. ex rel. Yarberry v. Supervalu, an important decision that may lead more unscrupulous government contractors to help themselves to public funds to which they are not entitled.  Unless the Supreme Court or Congress steps in to correct the Seventh Circuit’s errors, the government may have...

July 14, 2021

Diesel Direct, LLC of Stoughton, Massachusetts will pay $850,000 to resolve claims brought in a qui tam action alleging that the company knowingly delivered nonconforming petroleum diesel fuel to state agencies while charging for a higher-priced and more environmentally-friendly biodiesel fuel; improperly charged state agencies a federal fuel excise tax; and failed to comply with the state's Supplier Diversity Program requiring spending with women-owned, minority-owned, and veteran-owned businesses. Mass

July 6, 2021

Defense contractor AAR Corp. and its subsidiary, AAR Airlift Group Inc., have agreed to pay $11 million to resolve allegations of knowingly failing to maintain U.S. military aircrafts in accordance with U.S. Transportation Command (TRANSCOM) contracts.  The alleged False Claims Act violations involved nine helicopters that were deemed not airworthy and not mission capable as a result of the failures.  A former Airlift employee who filed the underlying qui tam complaint, Christopher Harvey, will receive over $2 million as part of the settlement.  USAO SDIL

June 16, 2021

Bedrock Group LLC agreed to pay $3.5 million to Massachusetts to resolve allegations that the company violated the Massachusetts False Claims Act by failing to fully and timely refund the state following the company's failure to deliver one million N95 masks ordered by the state.  Massachusetts placed an emergency purchase order with the company, agreeing to pay $3.6 million for the one million masks, which were to be delivered by April, 2020.  The company delivered fewer than 100,000 masks and, after the state cancelled the purchase order, failed to refund the state's payment. Bedrock also agreed to a voluntary debarment from contracting with the state or any political subdivision for five years.   MA

June 4, 2021

Mark Sand & Gravel Co., a contractor on federally-funded road construction projects administered by the Minnesota Department of Transportation, has agreed to pay $1.75 million to settle claims under the federal and Minnesota False Claims Acts.  On three separate projects, Mark Sand & Gravel allegedly failed to follow contract specifications, used substandard gravel materials without authorization, and made false claims and statements regarding those materials.  USAO MN

April 20, 2021

A construction firm in California that allegedly violated federal contracting rules has agreed to pay $2.5 million to resolve civil and criminal charges relating to the misconduct.  In order to qualify for contracts set aside for service-disabled, veteran-owned small businesses (SDVOSB), the owners of Stronghold Engineering, Inc. (SEI) colluded with Kadena Pacific, Inc. (KPI)—owned by a qualifying veteran and the father of SEI owner Beverly Bailey—to obtain fourteen contracts from the VA that were intended for SDVOSBs.  USAO CDCA
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