Government Procurement Fraud

April 8, 2015

Orlando-based Air Ideal Inc. and its majority owner, Kim Amkraut, agreed to pay $250,000 to resolve allegations they made false statements to the Small Business Administration to improperly obtain certification as a Historically Underutilized Business Zone (HUBZone) company.  They must also pay five percent of Air Ideal’s gross revenues over the next five years.  Specifically, the government alleged Air Ideal used its fraudulently-procured HUBZone certification to obtain contracts from the US Coast Guard, US Army, US Army Corps of Engineers and the US Department of the Interior.  The allegations first arose in a whistleblower complaint filed under the qui tam provisions of the False Claims Act by Patricia Hopson.  She will receive a whistleblower award of $42,500.  DOJ

March 18, 2015

Gilbane Building Company agreed to pay $1.1 million to resolve allegations that W.G. Mills Incorporated (which Gilbane merged with in November 2010) violated the False Claims Act by creating a front company, Veterans Constructors Incorporated (VCI), in order to be awarded a Coast Guard contract that was designated for Service Disabled Veteran Owned Small Businesses.  VCI agreed to pay $50,000 plus five annual contingency payments equal to one percent of VCI’s total annual revenues to resolve the same allegations.  DOJ

December 19, 2014

Boston-based records storage company Iron Mountain agreed to pay $44.5M to resolve allegations it violated the False Claims Act by overcharging federal agencies for record storage services under General Services Administration (GSA) contracts. The charges originated with a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Brent Stanley, a former Iron Mountain employee, and Patrick McKillop, who worked in the records management industry. Collectively, they will receive a whistleblower reward of $8M. DOJ

November 19, 2014

Washington Gas Energy Systems agreed to pay more than $2.5M for conspiring to commit fraud by illegally obtaining contracts that were meant for small, disadvantaged businesses. It is a wholly owned subsidiary of WGL Holdings Inc., the parent company for all of the corporations within the Washington Gas family. According to the government, WGESystems conspired with a company that was eligible to receive federal government contracts set aside for small, disadvantaged businesses with the understanding that the business would illegally subcontract all of the work on the projects to WGESystems. In this way, WGESystems was able to capture a total of eight contracts worth almost $18M that should have gone to an eligible company. DOJ

October 21, 2014

Science Applications International Corporation(SAIC), now known as Leidos Holdings Inc., agreed to pay $1.5M to resolve False Claims Act allegations that it knowingly engaged in prohibited conflicts of interest as a contractor for the U.S. Nuclear Regulatory Commission (NRC) between 1992 and 2000. SAIC provides scientific, engineering and other technical services for government and commercial customers. Between 1992 and 2000, SAIC held two contracts with the NRC to provide scientific and technical services, including assisting the NRC in its consideration of a rule that could have permitted the release or recycling of certain types and quantities of material with very low levels of radioactivity below regulatory safety limits. According to the government, SAIC repeatedly and falsely certified it had no conflicting business relationships when in fact it actually engaged in multiple business relationships with entities that had a financial interest in the outcome of the NRC’s rulemaking effort. DOJ

October 7, 2014

Virginia based telecommunications services provider DRS Technical Services Inc. agreed to pay $13.7 million to settle charges it violated the False Claims Act by overbilling the government for work performed by DRS personnel who lacked the job qualifications required by the company’s government contract. The charges related to services and supplies DRS provided to the US Army’s Communication and Electronics Command (CECOM) in Iraq and Afghanistan, and to the US Coast Guard for aircraft maintenance. Whistleblower Insider

August 19, 2014

Samsung Electronics America agreed to pay $2.3 million to resolve allegations it caused the submission of false claims for products sold on General Service Administration (GSA) Multiple Award Schedule contracts in violation of the Trade Agreements Act of 1979. DOJ

August 1, 2014

Hewlett-Packard Co. agreed to pay $32.5 million to resolve allegations under the False Claims Act that HP overcharged the U.S. Postal Service (USPS) for products between October 2001 and December 2010. According to the government, HP overcharged USPS by failing to comply with pricing terms of its USPS contract, including a requirement that HP provide prices that were no greater than those offered to HP customers with comparable contracts. DOJ

July 8, 2014

Virginia-based move management company RE/MAX Allegiance Relocation Services agreed to pay roughly half a million dollars to resolve allegations it violated the False Claims Act by overbilling the government for transportation services. The government alleged RE/MAX charged the government for federal employee relocation services it never provided and charged inflated rates for relocation services it did provide by charging inapplicable tariff rates. Former RE/MAX employee Michael Angel will receive a whistleblower reward in an undisclosed amount under the qui tam provisions of the False Claims Act. DOJ

March 7, 2014

Ocean shipping companies Sea Star Line and Horizon Lines agreed to pay $1.9M and $1.5M, respectively, to resolve allegations that they violated the False Claims Act by fixing the price of government cargo transportation contracts between the continental US and Puerto Rico, the Department of Justice announced today. The allegations were first raised in a qui tam lawsuit filed under the whistleblower provisions of the False Claims Act. DOJ