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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:

Page 13 of 14

Forty-Two California Government Entities Join Whistleblower Suit Against Nation’s Largest Wireless Carriers

San Francisco, CA (December 8, 2015) – More than 40 California government entities have joined a lawsuit filed by a whistleblower against Verizon, AT&T, Sprint, and T-Mobile. The case, brought in Sacramento County Superior Court under the California False Claims Act, alleges that the wireless companies overcharged government customers by more than $100 million. The government intervenors and the whistleblower are represented by Constantine Cannon LLP. The action was unsealed by the Court on December 7, 2015. The wireless companies are alleged to have ignored two cost-saving requirements included in the master contracts under which California state and local government customers purchased wireless services.  Specifically, the master contracts required the carriers to determine and report to the government customers which rate plan selections would result in the lowest cost – referred to as “rate plan optimization” – and to provide wireless services at “the lowest available cost.” Rate plan optimization is a computerized service that analyzes individuals’ usage patterns quarterly and identifies the least expensive service or rate plan for each phone or user. Selecting the rate plan that best matches usage patterns reduces costs by 20-30% over the term of a contract.  Although the master contracts with the government required it, the wireless carriers did not prepare or provide rate plan optimization reports, the lawsuit alleges.  Further, as the carriers did not bill government customers utilizing the most cost effective rate plans, the defendants are also alleged to have failed to provide service at the “lowest available cost.”  The carriers’ failure to live up to their contractual promises, the lawsuit alleges, resulted in overcharges to the government of more than $100 million. “The carriers promised optimization in order to win these government contracts, which are worth billions of dollars,” said Anne Hayes Hartman, a partner at Constantine Cannon with extensive experience representing whistleblowers and government entities in False Claims Act cases. “But while they were happy to take the government’s money, the carriers simply ignored their commitments to bill using the lowest cost rate plans.  The carriers profited and taxpayers paid the price.” “We look forward to recovering the lost savings and securing ongoing contract compliance for the many government entities that were damaged,” said Wayne T. Lamprey, a partner at Constantine Cannon and former Assistant U.S. Attorney. The action was brought by OnTheGo Wireless, which has been one of the leading rate plan analysis firms in the country and a pioneer in the field of rate plan optimization. The case is State of California et al. ex rel. OntheGo Wireless, LLC v. Cellco Partnership et al., Case No. 34-2012-00127517 (Super. Ct. Cal., Sacramento County). Intervening Entities Regents of the University of California Los Angeles County Madera County Marin County Orange County Riverside County Sacramento County San Bernardino County Santa Cruz County Sonoma County Stanislaus County Yuba County City of Capitola City of Chino City of Corona City of Fortuna City of Long Beach City of Oxnard City of Rancho Cucamonga City of Ripon City of Riverside City of Sacramento City of San Bernardino City of San Mateo City of Santa Cruz City of Santa Rosa City of Vernon City of Victorville Grossmont Union High School District Irvine Unified School District Kaweah Delta Health Care District Kings Canyon Unified School District Olivenhain Municipal Water District Sonoma County Water Agency Rosemead School District Saddleback Valley Unified San Diego Unified School District Santa Cruz Public Libraries Torrance Unified School District Victor Valley Transit Authority Whittier Union High School District Woodbridge Fire District   About Constantine Cannon LLP Constantine Cannon, with offices in New York, Washington D.C., San Francisco and London, has deep expertise in practice areas that include antitrust and complex commercial litigation, whistleblower representation, government relations, securities and e-discovery. The firm’s antitrust practice is among the largest and most well recognized in the nation. Constantine Cannon’s experience spans across multiple industries including healthcare, banking, electronic payments, insurance, high tech, telecommunications, the Internet and government contracting. Constantine Cannon’s whistleblower lawyer practice represents whistleblowers under the False Claims Act, the Dodd-Frank Act, and the various federal and state laws that encourage industry insiders to report evidence of fraud or misconduct. The firm was one of the first in the country to bring a claim under the whistleblower provisions of the Dodd-Frank Act.

November 3, 2015

In a consent judgment, Hess Corporation has agreed to pay $4.4 million over allegations that it illegally obtained reimbursements from a Massachusetts state fund for environmental cleanup projects at dozens of gasoline service stations throughout the state. The complaint alleged that Hess submitted reimbursement applications to the Massachusetts Underground Storage Tank Petroleum Product Cleanup Fund program (UST Fund) with false certifications in that they failed to disclose the companies’ insurance claims, and therefore were not in compliance with applicable regulations. MA

November 3, 2015

A construction company, D’Allessandro Corp., has agreed to pay $190,000 and conduct trainings to resolve allegations it falsely certified compliance with equal opportunity requirements on multiple public construction contracts in Massachusetts. MA

October 21, 2015

United Parcel Service has agreed to pay $4 million to resolve allegations that the company violated the false claims acts of 14 states, New York City, Washington D.C., and Chicago.  Under contracts at issue between UPS and the government, UPS guaranteed delivery of packages by certain specified times the following day. The investigation began after a UPS employee filed a federal whistleblower lawsuit in Virginia alleging that a practice of falsifying package arrival times and logging in phony reasons for late arrivals went on company-wide. The UPS employee alleged that, in some cases, bogus exception codes excusing late deliveries were entered into the tracking system before UPS drivers had even arrived at locations where cumbersome security procedures and other delays had purportedly occurred. The state settlement follows an earlier $25 million settlement with the federal governmentNJ; NY

August 20, 2015

Three construction companies have agreed to settle for a total of $1.4 million to resolve allegations they falsely certified compliance with minority-owned subcontractor requirements on multiple public construction contracts in Massachusetts. The Commonwealth’s complaint alleges that CTA Construction Company, Inc., MDR Construction Company, Inc., and minority-owned business enterprise Luxor Equipment Corporation, Inc., now known as Margen, Inc. violated the Massachusetts False Claims Act in connection with three contracts. MA

Fourth Circuit Embraces Expansive View of False Claims Act Fraud and Materiality In Triple Canopy Ruling

Posted  01/15/15
By Gordon Schnell Another circuit court decision giving a properly expansive view of what it takes to make out a fraud claim under the False Claims Act.  This one from the Fourth Circuit in United States v. Triple Canopy, Inc..  Before the Court were two key questions.  One, whether a defense contractor's claim for payment still could be false when there was nothing false on the face of the invoice.  And two,...

Fifth Circuit Finds Government Knowledge Defense Not Appropriate On Motion To Dismiss

Posted  01/8/15
By the C|C Whistleblower Lawyer Team Under the so-called "government knowledge" defense, the government's awareness of a fraud can defeat False Claims Act liability on the ground the defendant did not "knowingly" defraud the government since the government acted with full information.  It is not a statutory defense but merely a way for a defendant to rebut the intent (or scienter) element of a False Claims Act...

Whistleblower Goes it Alone and Wins Big in Guardrail Case

Posted  10/23/14
By the C|C Whistleblower Lawyer Team A federal jury in Texas this past Monday came down hard against highway guardrail maker Trinity Industries in a whistleblower action brought by one of Trinity's competitors, a guardrail installer named Joshua Harman.  He claimed Trinity cut corners on its guardrails, did not come clean with the government, and ultimately put millions of motorists at serious risk.  The jury...

JM Eagle — Government Contracting Fraud/Noncompliance with Industry Standards ($22.5 million).

Two of our whistleblower attorneys led the representation of whistleblower John Hendrix, a former engineer at JM Eagle, as well as dozens of public agencies, in a two-month jury trial in Los Angeles against JM Eagle, the largest PVC pipe maker in the world. The jury returned a 50-page verdict finding that, over a ten-year period, JM Eagle had falsely represented its compliance with industry standards related to long term strength and durability of its PVC pipe. The pipe is buried deep underground in hundreds of municipalities around the nation. The damages phase of the case has not yet been held. However, a co-defendant in the case, Formosa Plastics, paid $22.5 million to settle its own potential liability, and Mr. Hendrix received a whistleblower reward from that settlement. See NY Times and Corporate Crime Reporter for more.

ATK — Government Contracting Fraud/Defective Product ($37 million).

One of our whistleblower attorneys led the representation of Kendall Dye, an engineer with what was formerly ATK Thiokol and is now ATK Launch Systems, who brought a qui tam action under the False Claims Act against ATK for selling defective flares to the United States military. According to the complaint, company testing revealed the flares could accidentally ignite if dropped from a height of as little as 11 inches. The flares burn at thousands of degrees, and are capable of burning through the hull of a ship, creating a significant safety risk. The government joined Mr. Dye’s case, and ATK ultimately settled for $37 million, with Mr. Dye receiving a whistleblower reward of $9 million. See NY Times for more.
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