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Government Procurement Fraud

This archive displays posts tagged as relevant to fraud in government contracting and procurement. You may also be interested in the following pages:

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May 13, 2022

Hensel Phelps Construction Company has agreed to pay $2.8 million to resolve allegations of violating the False Claims Act in connection with a federal subcontract designated for service-disabled, veteran-owned small businesses (SDVOSB).  Under a 2011 contract with the General Services Administration to construct a building in Washington, D.C., Hensel Phelps was required to set aside subcontracts for SDVOSBs and other small businesses.  According to qui tam plaintiff Fox Unlimited Enterprises, LLP, the company instead made arrangements with another large business to provide equipment and installation services, and used a SDVOSB in name only.  USAO NDNY, USAO EDWA

April 29, 2022

KCF Technologies, Inc., will pay the United States $1,226,436.14 for False Claims Act violations. KCF engaged in procurement fraud by billing labor time spent on commercial contracts improperly to DOD contracts it had with the Department of the Navy and the Department of the Army between 2016 and 2019. MDPA

March 25, 2022

A Department of Energy contractor that applied for and received a $1.3 million Paycheck Protection Program loan has, together with its owners, agreed to pay nearly $3 million in restitution and penalties to resolve their liability under the False Claims Act.  HPM Corporation and owners Holly and Grover Cleveland Mooers admitted that they submitted materially false statements to the Small Business Administration in order to obtain the loan and induce a forgiveness of the loan.  However, instead of using the funds on payroll, as they had represented, they transferred the entire amount to their personal account.  USAO EDWA

March 21, 2022

United Parcel Service Inc. (UPS) has agreed to pay $5.3 million to resolve its potential liability under the False Claims Act.  Under a contract with USPS to deliver mail for various Department of Defense and State Department locations domestically and internationally, UPS was required to submit confirmation of delivery and delivery times to USPS.  However, the company allegedly reported false information.  DOJ

March 14, 2022

Freight carriers YRC Freight Inc., Roadway Express Inc., and Yellow Transportation Inc. will pay $6.85 million to resolve government claims that they knowingly overcharged the Department of Defense on military freight shipments.  Whistleblower James Hannum, a Yellow Transportation employee, filed a qui tam action alleging that the companies had a practice of re-weighing shipments and, when the reweighs showed an increase from the original weight, defendants charged DOD for these higher weights, but when the reweighs showed a decrease from the original weight, defendants allegedly concealed the lower weight and instead charged DOD for the original, inflated weights.  Hannum will receive a whistleblower award of approximately $1.3 millionDOJ

March 8, 2022

Comprehensive Health Services LLC (CHS), a Florida-based contractor that provides medical services at government facilities in Iraq and Afghanistan, has agreed to pay $930,000 to resolve claims under the False Claims Act.  According to two separate qui tam cases filed in the Eastern District of New York, CHS falsely certified to the State Department and Air Force that it had complied with contractual cybersecurity requirements when, in fact, it had failed to to properly store patient medical records on a secure electronic medical record system, and had falsely represented that it used approved medical supplies when, in fact, it had relied on unapproved controlled substances from foreign sources.  DOJ; USAO EDNY; USAO MDFL

March 7, 2022

MOX Services LLC, formerly known as CV&I AREVA MOX Services LLC (MOX), has agreed to a $10 million settlement to resolve allegations of violating the False Claims Act.  As the prime contractor for a federal facility in South Carolina, MOX was responsible for confirming receipt of materials from any subcontractors before presenting claims to the government.  According to the DOJ, however, MOX knowingly sought reimbursement from the Department of Energy for millions of dollars of materials not received from one of its subcontractors, Wise Services Inc., and which it submitted to the DOE in exchange for kickbacks from Wise.  DOJ

March 3, 2022

Multiple chemical companies agreed to pay a collective total of $11.7 million to resolve claims by state and local entities that from 1997 through at least 2011, they participated in a nationwide conspiracy to allocate territories and customers, unlawfully rig bids, and fix prices paid by government entities for the purchase of coagulant liquid aluminum sulfate, a chemical used in water treatment and purification.  The defendants include General Chemical entities, GenTek, Inc., Chemtrade entities, GEO Specialty Chemicals, Inc., C&S Chemicals, Inc., USALCO, LLC, Delta Chemical Corporation, and American Securities, LLC.  The Commonwealth of Virginia recovered $1.1 million in a whistleblower case initiated under the Virginia Fraud Against Taxpayers Act by Lawrence McShane.  VA

TriMark Settlement Highlights Fraud in Set-Aside Programs

Posted  03/1/22
In a settlement that DOJ has touted as “the largest-ever False Claims Act recovery based on allegations of small business contracting fraud,” food services equipment supplier TriMark USA agreed to pay $48.5 million to resolve allegations that its subsidiaries used front companies owned by service-disabled veteran-owned small businesses (SDVOSBs) to secure federal set-aside contracts.  While TriMark made it appear...

February 23, 2022

TriMark USA, LLC and related entities will pay $48.5 million to resolve claims brought in a whistleblower lawsuit alleging that they improperly manipulated federal contract set-asides for service-disabled, veteran-owned small businesses (SDVOSB) by enlisting small business to secure the contracts while TriMark actually performed all of the work and received most of the benefits of the federal contract.  In addition, former TriMark executive Kimberley Rimsza has agreed to pay $100,000 to resolve claims against her.  The whistleblower, Fox Unlimited Enterprises, LLP, will receive an award of $10.9 millionUSAO ND NY; USAO ED WA
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