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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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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

February 11, 2022

Transportation company Academy Bus, LLC, together with related entities and individuals, will pay $20.5 million to resolve claims brought in a whistleblower lawsuit under New Jersey’s False Claims Act that the defendants defrauded New Jersey Transit, for whom defendants operated bus routes.  Defendants were paid by NJ Transit based, in part, on miles and hours driven, with deductions for missed bus trips; they were alleged to have over-reported miles and hours driven, and underreported their missed bus trips to the state.  The settlement also required Academy to implement specific compliance procedures.  The whistleblower, former Academy employee Hector Peralta, will receive an award totaling $3.9 millionNJ

DOJ Announces $5.7 Billion in FCA Recoveries in Fiscal Year 2021, with Boost from Purdue Settlement Claim

Posted  02/2/22
Department of Justice
DOJ has released its annual announcement of recoveries in civil cases involving fraud and false claims against the government, and the total recoveries are eye-popping: $5.65 billion in settlements and judgments.  These recoveries make FY2021 the second largest year in False Claims Act history, and the largest since 2014. As in prior years, healthcare fraud dominated, with more than $5 billion of the total...

January 12, 2022

Idaho-based Native American Services Corp. (NASCO) and Texas-based Mirador Enterprises, Inc. (Mirador) have agreed to pay $750,000 and $400,000 respectively, for a combined settlement of $1.15 million, to resolve allegations of fraudulently obtaining two construction contracts at Colorado’s Fort Carson Army installation.  According to the DOJ, one contract was set aside for eligible economically and socially disadvantaged small businesses, and the other was set aside for eligible small businesses.  Although Mirador was eligible for both contracts, it allowed its mentor NASCO to take on the primary role in the performance of the contracts; both companies then took steps to conceal the fraud.  USAO CO

Top Ten Non-Healthcare False Claims Act Recoveries of 2021

Posted  01/7/22
Abe Lincoln
Our roundup of 2021’s Top Ten Non-Healthcare False Claims Act (FCA) recoveries illustrates the statute’s continuing capacity to fight both conventional and emergent frauds straddling a variety of industries. In 2021 alone, the United States recovered hundreds of millions in taxpayer funds obtained through false claims tainted by textbook contracting fraud schemes (overbilling on government contracts, selling the...

January 6, 2022

SoNo International LLC and Ark Capital Equipment LLC have agreed to pay $904,000 to resolve allegations of supplying the Department of Defense with shipping containers that were made in China or made of Chinese steel, in violation of contracts as well as the False Claims Act.  As part of the settlement, the two companies will also submit to enhanced training and reporting requirements pursuant to an administrative agreement with the Defense Logistics Agency.  An unnamed third-party company, which SoNo and Ark hired to change identifying plates on the shipping containers, has separately agreed to train employees on customs rules and regulations.  USAO EDPA

January 5, 2022

A Kansas-based contractor who illegally obtained $346 million in contracts set aside for service-disabled veterans and certified minorities has been sentenced to a little over two years in prison and ordered to forfeit over $5.5 million.  Between 2009 and 2018, defendant Matthew McPherson was awarded approximately 199 federal contracts, upon which he was paid approximately $335 million, through Zieson Construction Company, which was nominally owned by an African-American service-disabled veteran.  When the company grew too large to compete for small business contracts, McPherson used an employee’s Native American minority status to set up Simcon Corp in order to obtain additional contracts.  USAO WDMO

Catch of the Week: Privatized Military Housing Contractor Pays Over $65 Million to Resolve Criminal and False Claims Act Allegations

Posted  12/23/21
Government contractors are held to high standards in the performance of their contracts or services because of the direct impact to government services and taxpayer dollars at stake. Often fraud related to government contractors can negatively impact U.S. servicemembers or public servants who diligently serve our country. This week we focus on the over $65 million judgment and settlement reached between the...
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