Contract Non-Compliance

August 5, 2019

Nagan Construction, Inc. of New York has agreed to pay $435,000 to resolve a civil fraud suit filed by an unnamed whistleblower, alleging that Nagan underpaid 20 employees working on two projects for the U.S. Merchant Marine Academy and the Department of Labor.  Nagan also allegedly violated the False Claims Act and the Davis-Bacon Act by misclassifying the skilled workers as unskilled workers in required certifications to the government.  As part of the settlement, $242,376 will be distributed to current and former employees.  USAO SDNY

July 16, 2019

A government contractor has agreed to pay $11 million to settle False Claims allegations of directly and indirectly supplying improperly tested electrical connectors to the U.S. military.  According to Ralph Tatgenhorst, a former regional quality manager for ITT Cannon, the company repeatedly failed to test six different models of connectors even after the government learned of the failure, and even after the company promised it would conduct remedial testing.  For coming forward with a successful qui tam case, Tatgenhorst will receive a relator’s share of $2 million.  DOJ; USAO CDCA

July 2, 2019

To settle a qui tam suit by a former employee, LexisNexis Risk Solutions and its affiliates have agreed to pay $5.8 million to resolve their liability under the Illinois, Massachusetts, New Jersey, New York, and Tennessee False Claims Acts.  LexisNexis had signed a contract with law enforcement agencies to access automobile crash reports that they then sold to individuals, insurance companies, and law firms for claims adjustment purposes.  According to the contract, LexisNexis would pay the agencies each time a report was sold; however, it allegedly paid the agencies for the first report only but not for each subsequent report.  AG IL; AG NJ; AG NY; Later Florida settlement

June 20, 2019

Two defense supply companies and their owners have agreed to a $159,390 consent judgment for improperly substituting parts intended for DOD contracts.  Liberty Air Parts, Inc., US Supply Corporation, and their operators, George and Ellen Onorato, allegedly agreed to supply brand new parts bolts, knobs, rings, and rivets, but instead substituted them with surplus parts left over from other government project.  They concealed the substitution by allegedly falsifying records and statements, in violation of the False Claims Act, and used the ability to quote prices lower than their competitors to their advantage in the contract bidding process.  As part of the consent judgment, the defendants are now prohibited from contracting with the federal government.  USAO EDPA

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

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