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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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August 13, 2019

Classic Site Solutions, Inc. (CSS), a Massachusetts-based construction management company, and owner Cheryl Sady, have agreed to pay $1.3 million to settle allegations that CSS’s conduct between 2009 and 2015 violated the False Claims Act.  In order to access government contracts set aside for companies located in Historically Underutilized Business Zones (HUBZones), CSS and Sady allegedly submitted false statements to the Small Business Administration (SBA) indicating their principal office was located in a HUBZone, which allowed them to fraudulently bid on and win contracts worth millions of dollars.  USAO CT

June 28, 2019

Following his conviction for illegally obtaining $11 million in contracts intended for service-disabled veteran-owned small businesses, a government contractor and his company have been ordered to pay $3.2 million, with $400,000 to be paid by the contractor, Andrew Otero, and $1.8 million to be paid by his company, A&D General Contracting.  Otero has also been sentenced to 1.5 years in prison.  USAO SDCA

Fraud in GSA Contracts: How to Report it Under the False Claims Act for a Whistleblower Reward

Posted  05/13/19
GSA Fraud Whistleblower
Federal government offices purchase all the products and services any office does: office supplies, telecommunications equipment and services, computer hardware and software, consulting services, vehicles, travel services, and so on. The General Services Administration is the centralized procurement arm for the federal government, overseeing tens of billions of dollars in procurement annually, as well as handling...

May 1, 2019

An Alaska Native Corporation that qualified for the Small Business Administration’s set aside contracts has agreed to pay $2 million to settle a whistleblower’s allegations that it paid kickbacks to obtain said contracts.  According to a qui tam complaint by Susann Campbell, Kikiktagruk Inupiat Corporation (KIC), and its subsidiary, KIC Development LLC (KICD), paid bribes to a contract employee with the U.S. Army Corp of Engineers in order to obtain preferential treatment and confidential government information to ensure it won a construction contract at the military’s Ft. Bliss installation in Texas.  USAO WDTX

February 21, 2019

Body armor manufacturer Survival Armor, Inc., will pay $900,000 to resolve claims that it falsely claimed to qualify as a small business to secure a five-year small business set-aside contract to provide tactical body armor to the Department of Homeland Security.  The company is, in fact, a subsidiary of a large foreign parent company, and not a small business.  USAO MD FL

December 21, 2018

The construction company of F.H. Paschen, S.N. Nielsen & Associates LLC will pay $2 million to settle allegations under the Illinois False Claims Act that it evaded requirements that it meet participation levels for certified small/minority/women-owned businesses on two contracts with the Metropolitan Water Reclamation District of Greater Chicago.  FHP was alleged to have falsely represented that a minority-owned business, Vargas Mechanical, Inc., would perform the work, in order to secure the contracts.  IL AG

December 19, 2018

Arvco Container Corporation of Kalamazoo, Michigan, will pay $400,000 to settle allegations that it violated the False Claims Act by performing 100% of the manufacturing work on a contract that had been awarded by the Defense Logistics Agency to Fibre Technologies LLC in Reading, Pennsylvania, subject to a HUBZone small business program that barred Fibre from subcontracting the entire manufacturing.  USAO MD Pa

November 21, 2018

Andrew Otero and his company, A&D General Contracting, Inc. (“A&D”) were convicted of multiple charges after they were found guilty of constructing a scheme to defraud the Department of Veterans Affairs and the Army Corps of Engineers in order to obtain approximately $11 million in federal government construction contracts or task orders set aside for small businesses owned by disabled veterans. Otero, as shown by evidence at trial, does not have any military experience. Yet he and his co-conspirator Roger Ramsey, a veteran, and on behalf of his company, Action, formed a joint venture and falsely represented to the government that Action and the JV met the qualifications to be a service-disabled veteran-owned small business (“SDVOSB”), thus enabling them to bid on the contracts. Additionally, evidence at trial showed that the JV’s daily operations and decision-making did not function as would a legitimate SDVOSB. All four defendants are also facing civil charges. Sentencing will take place on February 19, 2019.    DOJ

October 12, 2018

Michael Martin, the owner of a New York-based general contractor called Eastern Building & Restoration, Inc. has plead guilty to a multitude of charges, including fraudulently obtaining public works contracts, withholding over $400,00 in wages from over 50 employees, and stealing over $150,000 each from a minority-owned business and an insurance company. According to the Attorney General, Martin and co-defendant Dr. Scott Henzel, also of Eastern Building and Restoration, took control of two minority-owned businesses in order to fraudulently obtain millions of dollars worth of contracts intended for minority-owned businesses. Furthermore, they underpaid laborers working on public works projects and created false documentation and certifications stating otherwise. Separately, Martin also embezzled over $150,000 from one of the businesses and caused a false insurance claim to be filed on its behalf. He will be sentenced in both Albany and Schenectady counties in early December.  NY AG

September 17, 2018

A father and son duo have been sentenced to decades in prison and are to pay over $1 million in restitution for defrauding small businesses, the Department of Agriculture (USDA), and the Small Business Administration (SBA). After being hired to help small businesses win contracts with the USDA, father Joseph Glenn Osborne, Sr. allegedly stole over half a million dollars paid to his clients and used the money to buy himself a mansion. Father and son then conspired with others to fraudulently win contracts with the same agency for son Joseph Glenn Osborne, II's business, and were awarded five contracts worth over $4 million. After the contracts were terminated for default—and company funds were used to fund renovations for the aforementioned mansion and extravagant nights out—they attempted to fraudulently win contracts with the SBA. USAO SDCA

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