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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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June 19, 2019

Memphis Goodwill Industries has agreed to pay $150,000 for allegedly making false certifications to the federal government in order to qualify for contracts administered by the AbilityOne Commission, which helps create job opportunities for disabled individuals.  Federal regulations required AbilityOne contractors like Goodwill to employ disabled individuals for 75% of its direct labor hours and submit annual certifications attesting to that fact.  Despite submitting certifications attesting to the 75%, Goodwill was found to allegedly employ disabled individuals for far fewer hours.  USAO WDTN

IBM Inks $14.8 Million False Claims Act Settlement

Posted  06/18/19
Coding Background with Error Written
On Friday, the Department of Justice announced that IBM and its subsidiary Cúram Software had agreed to pay $14.8 million to resolve allegations that they lied to the State of Maryland while bidding on a contract to develop the state’s Health Insurance Exchange (HIX) website and IT platform. DOJ sued IBM under the False Claims Act, which imposes liability on companies and individuals that defraud government...

June 11, 2019

Richard Moore, a contractor at the Savannah River Nuclear Site in South Carolina, has agreed to pay $1.6 million to resolve allegations of defrauding the government.  Through his companies, Carolina Sodding Services, LLC and Carolina Enterprises of the Lowcountry, LLC, Moore allegedly violated the False Claims Act by submitting false certifications that his companies were women-owned businesses,[no comma needed] and submitting false invoices for materials that were never provided.  USAO SC

Whistleblowers Needed to Stop Secret Kickbacks, Bribes, Overcharging, and False Costs in E-Rate, Lifeline, Connect America, and Rural Healthcare programs

Posted  06/7/19
By Jessica T. Moore
Large broadband cable bales awaiting installation on rural road.
The FCC disburses billions of dollars every year for its massive Universal Service Fund (USF) and its laudable mission to promote telephone and internet access to all U.S. persons regardless of income and location. This massive pot of government money attracts a commensurate measure of opportunists seeking to defraud these well-meaning programs.

What is the Universal Service Fund?

The Universal Service Fund...

WATCH THIS SPACE: Proposed $700M Fix for Installed Foreign-Telecom Could Compound Fraud Related to Universal-Service-Fund Projects

Posted  05/31/19
Hand touching lock icon on modern digital screen interface stating “hacking detected” and “security breach”
Congress, the President, and the FCC are moving to restrict and phase out foreign-made telecommunications components seen as national security risks. While the president’s executive order of May 15, 2019 prohibits U.S. companies from buying foreign telecom, we have a huge problem: our systems already have large quantities of this equipment installed – antennas, radios, electronics, routers, services, etc. The...

Immigration Detention Facilities Continue to Pose Fraud Risks

Posted  05/9/19
By Sarah “Poppy” Alexander
Child Behind a Fence
Last summer, we wrote about the fraud risks inherent in the massive increase in government spending for immigration detention. Almost one year later, a child’s tragic death again calls attention to failures at the immigration facilities that maintain ever increasing government contracts. On April 30, 2019, a sixteen-year-old boy died at a Southwest Key facility in Brownsville, TX, two weeks after arriving in the...

Catch of the Week — Rocket and Missile Parts Manufacturer Hydro Extrusion Portland

Posted  04/26/19
Space Shuttle launching
Our Catch of the Week goes to Hydro Extrusion Portland, Inc., formerly Sapa Profiles Inc., an aluminum extrusion manufacturer that made parts used by NASA and the Missile Defense Agency (MDA) in rockets and missiles.  The DOJ agreed to resolve criminal and civil claims relating to the manufacturer’s 19-year fraud scheme for $46 million in forfeitures, criminal fines, and amounts to settle civil False Claims Act...

April 23, 2019

Oregon-based aluminum supplier Hydro Extrusion Portland, Inc., formerly known as Sapa Profiles Inc., together with its parent company, has agreed to pay $47 million to settle criminal mail fraud charges and civil claims alleging that between 1996 and 2015, the company altered the results of tensile tests measuring the consistency and reliability of extruded aluminum, and falsified certifications about products meeting testing requirements and contract specifications. Among the customers who received products that defendants knew did not meet contract specifications were NASA and the Dept. of Defense Missile Defense Agency.  The $47 million total settlement payment consists of forfeiture of $1.8 million, $34.1 million in criminal restitution to NASA, DOD, and commercial customers – $23.6 million of which is also credited to resolve civil claims under the False Claims Act – and an additional $11 million in payments to resolve civil FCA claims.  Defendant entered into a deferred prosecution agreement and has been  suspended as a U.S. government contractor.  DOJ; USAO EDVA

Catch of the Week – EHR Developer Greenway Health to Pay $57.25 Million to Settle FCA Allegations

Posted  02/8/19
Person in scrubs holding computer tablet projecting medical data
Electronic health records (EHR) software developer Greenway Health LLC agreed to pay $57.25 million to resolve allegations that it committed fraud by misrepresenting to its users the capabilities of its EHR product “Prime Suite” and by providing unlawful remuneration to users to induce them to recommend Prime Suite. Under the American Recovery and Reinvestment Act of 2009, the government made incentive payments...

February 8, 2019

In connection with alleged fraud on a multi-billion dollar Department of Energy contract, the United States has filed a False Claims Act complaint against Mission Support Alliance LLC (MSA), Lockheed Martin Services Inc. (LMSI), Lockheed Martin Corporation (LMC) and Jorge Francisco Armijo, currently VP of LMC but formerly president of MSA. The complaint alleges that defendant LMSI violated the FCA by submitting false statements about its profits to order to inflate its billing rate. The complaint also alleged that, in violation of the Anti-Kickback Act, defendant LMC paid Armijo and other MSA executives more than $1 million in order to win a $232 million subcontract to clean up the Hanford nuclear waste site in Washington State. DOJ; USAO EDWA
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