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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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March 12, 2020

To resolve False Claims Act allegations, Ohio-based Sterling Medical Associates Inc. has agreed to pay $1.85 million to the VA in connection with claims from two of its outpatient clinics in Minnesota.  Based on the contract it had with the VA, Sterling was required to schedule appointments within 14 calendar days of a veteran's requested appointment date, but failed to do so and instead, manipulated requested appointment dates to make appointment wait times appear shorter.  DOJ; USAO MN

Unitrans International Inc., Anham FZCO, et al. — Government Contract Fraud ($45 million)

Our attorneys represented Rory Maxwell, John Bush, and Supreme Foodservice GmbH in a qui tam action under the False Claims Act against Unitrans International Inc., a privately held Virginia defense contracting company, and Anham FZCO, an associated Dubai Free Zone company, for making false certifications of compliance with the U.S. sanctions regime against Iran to induce the U.S. Defense Logistics Agency and the U.S. Army to award Anham wartime contracts to provide food and transportation to U.S. troops.  Our whistleblower clients also alleged Anham knowingly and falsely represented construction progress on its Bagram warehouse in related bid proposals to the government.  In December 2019, Unitrans agreed to pay $45 million to resolve criminal and civil allegations related to this alleged misconduct, which includes $27 million to resolve our whistleblower clients’ False Claims Act allegations.  Read more about the case at the Department of Justice website here and in The Washington Post here.

December 4, 2019

A subcontractor providing logistical services on a U.S. Defense Logistics Agency (DLA) contract with Anham FZCO has agreed to pay $45 million to resolve criminal obstruction charges and civil False Claims Act allegations.  Anham and Unitrans International Inc. had been accused of failing to comply with contract provisions prohibiting materials used to support U.S. troops in Afghanistan from passing through Iran.  Based on a qui tam suit by whistleblowers Rory Maxwell, John Bush, and Supreme Foodservice GmbH, the two contractors also fraudulently induced contracts with DLA and the Army by falsely certifying compliance with the Iran sanctions and falsely representing the status of another project.  DOJ

December 3, 2019

Weapons manufacturer Capco, LLC has agreed to pay over $1 million to resolve fraud allegations raised by its former quality engineer, James Cole.  According to Cole, from 2016 to 2018, the company knowingly certified that M320 grenade launchers sold to the U.S. Army were manufactured in compliance with contract specifications, when in fact a critical component had been manufactured using the wrong type of steel.  Capco also failed to disclose the issue despite conducting an internal investigation.  For bringing the issue to light, Cole will receive approximately $235,000 of the recovery. USAO CO

September 13, 2019

United Parcel Service will pay $8.4 million to resolve allegations that it overcharged federal agencies purchasing UPS ground delivery services under a General Services Administration Multiple Award Schedule contract by failing to adhere to the contract's Price Reductions Clause.  UPS was alleged to have offered lower prices to other customers without offering those same prices to the U.S., resulting in the government overpaying for package deliveries.  DOJ

September 5, 2019

The owner of two defense contracting firms, Tico Manufacturing Inc. (TICO) and Military and Commercial Spares Inc. (MCS), has been sentenced to 3 years in prison and ordered to pay $8 million in restitution for conspiring to defraud the Department of Defense.  Between 2011 and 2015, Roger Sobrado fraudulently obtained DoD contracts by claiming that conforming parts for critical military equipment, including fighter jets and helicopters, would be supplied through authorized manufacturers.  Instead, Sobrado supplied non-conforming parts through non-authorized manufacturers, recruited family members to commit the same fraud, and collected DoD payments from his family members.  Additionally, he failed to report almost half of his taxable income for three years, causing the United States to lose a total of $509,962.  USAO NJ

Catch of the Week — American Airlines Required to Pay Over $22 Million for Falsely Reporting Delivery Times

Posted  08/23/19
Ever wondered why a package you were desperately waiting for showed up late?  Ever wished you could hold those responsible accountable for it? If so, the U.S. government agrees with you.  Its recent settlement against American Airlines required the airline to pay over $22 million for allegedly falsely reporting its delivery times.  The resolution shows that timeliness matters and is yet another reminder that...

August 20, 2019

American Airlines, Inc. will pay $22.1 million to resolve claims that it falsely reported contract performance times in a contract between the airline and the United States Postal Service.  The contract required American Airlines to take possession of U.S. mail receptacles at domestic locations as well as international locations of the Department of Defense and State Department, and report the time the receptacles were delivered at specified locations by submitting an electronic scan.  American Airlines was alleged to have falsified delivery information, thereby concealing contractual non-compliance and avoiding penalties for late delivery.  DOJ

August 15, 2019

ManTech Advanced Systems International, Inc., a subcontractor on a project with the Environmental Protection Agency, will pay $750,000 to resolve allegations that a project manager required to have top secret clearance had his clearance revoked during the term of the contract.  In addition, when the contract was extended, ManTech again represented that the project manager had top secret clearance.  Despite the revoked clearance, ManTech billed the EPA over $325,000 for the individual's services.  USAO ED VA.
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