Top Ten Non-Healthcare False Claims Act Recoveries of 2019
Posted 01/10/20
Defense Contract Fraud
This archive displays posts tagged as relevant to fraud in defense and military contracts. You may also be interested in the following pages:
December 12, 2019
For selling defective, Chinese-made products to the U.S. Department of Defense on fraudulently obtained contracts, Timothy Kelly, a California business manager for Emerson Company, has been sentenced to 2.5 years in prison. Together with company owner Daniel Norton, who was sentenced to 8 years in prison, the two have also been ordered to pay $2.38 million in restitution, forfeit $333,000 in a bank account, and forfeit a $725,000 house in Hawaii. USAO SDOHDecember 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. DOJDecember 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 CONovember 18, 2019
Daniel Norton, the owner of former DOD contractor Emerson Company, has been sentenced to 8 years in prison following his guilty plea on charges that he fraudulently obtained government contracts and obstructed justice. According to the evidence at trial, Emerson Company had been debarred in 2011, but Norton used front companies to fraudulently secure purchase orders for parts to be supplied to the military. In violation of contract Buy-American requirements, Norton filled the purchase orders by supplying non-conforming products manufactured in China, even where the contract called for a specific part from an American manufacturer. In addition to his prison sentence, Norton was ordered to pay $2.4 million in restitution, and forfeit property valued at over $1 million. USAO SD OHNovember 18, 2019
Computer hardware supplier Eagle Alliance will pay $110,000 to resolve a case brought by a whistleblower alleging that the company improperly double-billed the government for computer equipment, and billed for used equipment as if it were new. Jeffrey Brenner, a former employee of Eagle Alliance, will receive $18,700 as a whistleblower reward. USAO MDNovember 13, 2019
Construction company ABS Development Corporation will pay $2.8 million, and give up $16 million in potential administrative claims, to resolve government charges that it secured a contract reserved for U.S. companies to renovate a U.S. Army shipyard in Haifa, Israel, by falsely representing that it would perform the work when, in fact, ABS knew that work would be performed by its Israeli parent company, Ashtrom International, Ltd. After being awarded the contract, ABS submitted false claims certifiying that it was performing the work as the prime contractor even though the work was being performed by Ashtrom. DOJOctober 24, 2019
Engineering firm CH2M Hill will pay $6.4 million to resolve claims that it billed the U.S. Air Force for work done by personnel who did not meet educational and work experience requirements set forth in a contract between the parties for environmental consulting work. The settlement arose following CH2M's 2017 disclosure of the overbilling and repayment of $10.5 million. Following that payment, the Air Force contended that CH2M knew about the overpayment as early as 2011, but sought to conceal the result of its internal audit, claiming privilege. USAO WD WAOctober 23, 2019
New York contractors Upstate Construction Services, LLC and Structural Associates, Inc. will pay more than $1 million to resolve allegations that they formed an undisclosed joint venture in order to qualify for and obtain bonding and contracts set aside for small businesses located in HUBZones. Although Upstate qualified as a HUBZone entity, Structural did not, and had Structural's share of Upstate's profits been disclosed, Upstate would not have been awarded the millions of dollars in contracts at issue. USAO NDNYAmazon Feels the Force
Posted 10/17/19
