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Set-Asides and Preferences

This archive displays posts tagged as relevant to fraud in government contracting set-aside and preference programs. You may also be interested in the following pages:

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October 7, 2020

J&K Contracting, Inc. will pay $350,000 to the State of Maryland to settle claims that the company violated the Maryland False Claims Act.  J&K and its principal, Kryiakos Kiotsekoglou, were alleged to have made false statements that they used and paid subcontractors certified under the state’s Minority Business Enterprise Program.  In addition to the fine, defendants have agreed to a voluntary debarment from contracting with the State.  MD

September 30, 2020

Industries for the Blind and Visually Impaired, Inc., paid $1.9 million to resolve claims brought by a whistleblower under the False Claims Act alleging that the defendant, which received set-aside contracts under the federal government’s AbilityOne Program in exchange for agreeing to provide jobs to workers who are blind or visually impaired, misrepresented its employment of blind personnel.  In addition, company personnel allegedly accepted impermissible payments from manufacturers and improperly subcontracted work on government contracts to companies that did not generally use blind labor.  DOJ; USAO ED WI

Fraudsters Beware: Flurry of Recent Actions in Enforcement Show that Contracting Fraud is a Priority

Posted  06/3/20
Business sign saying "Come In We're Open" in white on blue background
Four recent state and federal actions indicate that government contracting fraud cases are in the spotlight. These actions all stemmed from alleged violations of laws that give certain businesses, such as, small, minority-owned, or veteran-owned businesses, advantages in obtaining government contracts. These contracts are often called “preference” or “set-aside” contracts and the goal of these laws is to...

June 2, 2020

An Oklahoma-based contractor and its corporate affiliates have agreed to pay $2.8 million to settle allegations of violating the False Claims Act in connection with federal contracts intended for disadvantaged small businesses.  In order to qualify as a small business, the Ross Group Construction Corporation created two companies, PentaCon LLC and C3 LLC, to bid on and obtain the contracts and falsely represented to the Small Business Administration the full extent of their affiliation.  The scheme was eventually revealed in qui tam case filed by Southwind Construction Services, LLC; the company will receive a relator’s share of approximately $520,000.  DOJ; USAO WDOK

May 27, 2020

A contractor tasked with constructing a new terminal of the Peoria International Airport using FAA grant funds has agreed to pay $1 million to settle allegations that it fraudulently obtained the contract by misrepresenting its use of a disadvantaged small business.  In violation of grant rules as well as the False Claims Act, Williams Brothers Construction Inc. allegedly made false representations and submitted fraudulent documents to make it appear that an eligible firm would do work on the project when instead the work was handed off to an ineligible firm.  DOJ; USAO CDIL

May 4, 2020

Two New York construction companies and their associates have agreed to pay $4.5 million to resolve allegations of defrauding the U.S. Small Business Administration (SBA) and exploiting federal contracting opportunities reserved for veteran-owned small businesses and small businesses located in historically underutilized business zones (HUBZones).  Northland Associates, Inc., its president James Tyler, The Diverse Construction Group, and bond agent Rose & Kiernan Inc. allegedly failed to disclose and took steps to conceal the extent to which Diverse, which is 51% vetern-owned and 49% owned by senior Northland officials, took direction from Northland.  The government’s investigation was triggered by whistleblower lawsuits; the whistleblowers in this case will receive $1 million of settlement proceeds.  USAO SDNY

December 16, 2019

A Wisconsin man charged with leading a 12-year fraud scheme to win $260 million in government construction contracts intended for small businesses has been sentenced to 6.5 years in prison and ordered to forfeit assets worth almost $4 millionBrian Ganos orchestrated the formation of three construction companies—Nuvo Construction Company, Inc., C3T, Inc., and Pagasa Construction Company, Inc.—and headed them with straw owners who qualified as disadvantaged individuals or service-disabled veterans in order to win government contracts.  USAO EDWI

November 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.  DOJ

October 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 NDNY

September 4, 2019

New Hampshire-based North American Specialty Insurance Company (NASIC) has agreed to pay $1 million to settle allegations of violating the False Claims Act by providing bonding to South Carolina general contractor Claro Company, Inc., despite having actual or constructive notice that Claro was making false and fraudulent statements to claim certification as a small business owned and controlled by socially and economically disadvantaged individuals under the Small Business Administration Section 8(a) Business Development Program.  By turning a blind eye, NASIC enabled Claro Company to continue bidding for set-aside contracts under the 8(a) program.  USAO WDNC
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