Government Procurement Fraud

July 14, 2021

Diesel Direct, LLC of Stoughton, Massachusetts will pay $850,000 to resolve claims brought in a qui tam action alleging that the company knowingly delivered nonconforming petroleum diesel fuel to state agencies while charging for a higher-priced and more environmentally-friendly biodiesel fuel; improperly charged state agencies a federal fuel excise tax; and failed to comply with the state's Supplier Diversity Program requiring spending with women-owned, minority-owned, and veteran-owned businesses. Mass

July 6, 2021

Defense contractor AAR Corp. and its subsidiary, AAR Airlift Group Inc., have agreed to pay $11 million to resolve allegations of knowingly failing to maintain U.S. military aircrafts in accordance with U.S. Transportation Command (TRANSCOM) contracts.  The alleged False Claims Act violations involved nine helicopters that were deemed not airworthy and not mission capable as a result of the failures.  A former Airlift employee who filed the underlying qui tam complaint, Christopher Harvey, will receive over $2 million as part of the settlement.  USAO SDIL

June 30, 2021

Armed Forces Services Corporation (AFSC) d/b/a Magellan Federal has agreed to pay over $4.3 million to resolve its liability under the False Claims Act.  In a written disclosure to the U.S. Small Business Administration, AFSC revealed that a former executive had orchestrated kickbacks for himself and two other executives in exchange for awarding subcontractors work on federal contracts.  USAO EDVA

June 25, 2021

Multinational telecommunications and internet service provider Level 3 Communications, LLC has agreed to pay over $12.7 million to resolve claims a former employee brought under the False Claims Act, alleging violations of the Anti-Kickback Act, False Claims Act, and Procurement Integrity Act.  Under a contract with the General Services Administration, Level 3 allegedly accepted kickbacks from subcontractors MSO Tech, Inc. and P.V.S. Inc. in exchange for steering work to them.  Additionally, under a contract with the Department of Homeland Security, Level 3 allegedly maintained that subcontractor PVS qualified as a contractually obligated woman-owned small business when in fact PVS is owned by a man.  USAO EDVA

June 25, 2021

Alabama-based NaphCare Inc. has agreed to pay nearly $700,000 to settle allegations of violating the False Claims Act in connection with healthcare services provided to inmates housed in an Indiana-based Federal Bureau of Prisons facility.  Between 2014 and 2020, NaphCare allegedly defaulted to charging the government for higher-level services than were provided when physicians failed to indicate the level of service provided.  DOJ

June 16, 2021

Bedrock Group LLC agreed to pay $3.5 million to Massachusetts to resolve allegations that the company violated the Massachusetts False Claims Act by failing to fully and timely refund the state following the company's failure to deliver one million N95 masks ordered by the state.  Massachusetts placed an emergency purchase order with the company, agreeing to pay $3.6 million for the one million masks, which were to be delivered by April, 2020.  The company delivered fewer than 100,000 masks and, after the state cancelled the purchase order, failed to refund the state's payment. Bedrock also agreed to a voluntary debarment from contracting with the state or any political subdivision for five years.   MA