false claims | The Contracting Education Academy

March 16, 2021 By cs

Federal contractor agrees to pay more than $6 million to settle overbilling allegations

Virginia-based Information Innovators Inc. (Triple-I) has agreed to pay the United States $6.05 million to resolve allegations that a predecessor company, Creative Computing Solutions Inc. (CCSi), violated the False Claims Act by knowingly overbilling the U.S. Department of Homeland Security (DHS) for work performed by CCSi employees who lacked required job qualifications.

Triple-I, which provides IT services and solutions to federal agencies, acquired Maryland-based CCSi in 2015. CCSi formerly provided IT services to DHS pursuant to an Enterprise Acquisition Gateway for Leading Edge Solutions Contract (EAGLE contract). The settlement resolves allegations that, from October 2007 to April 2014, CCSi knowingly submitted claims for payment to DHS for work performed by CCSi employees who lacked required job qualifications. CCSi allegedly violated the terms of the EAGLE Contract by using under-qualified personnel who were billed to DHS at higher rates reserved for more qualified employees.

“Contractors that knowingly overcharge the government will be held accountable,” said Acting Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The department will ensure that that those who do business with the government, and seek taxpayer funds, do so fairly and in accordance with their contractual commitments.”

“Defense contractors are required to bill for costs actually incurred, and to be truthful in the claims they submit to federal agencies,” said Acting U.S. Attorney Jonathan F. Lenzner for the District of Maryland. “The U.S. Attorney’s Office and our partners are committed to protecting taxpayer dollars and ensuring integrity and compliance with federal agency standards.”

“DHS OIG remains committed to protecting government programs, and American taxpayers who contribute to them, from fraudsters,” said Inspector General Joseph V. Cuffari. “Our agency, working closely with our law enforcement partners, will continue to root out these unlawful contracting fraud schemes.”

The settlement was a result of a joint investigation by the DOJ’s Civil Division’s Commercial Litigation Branch (Fraud Section), the U.S. Attorney’s Office for the District of Maryland, and the Department of Homeland Security Office of the Inspector General’s Major Frauds and Corruption Unit. The claims resolved by the settlement are allegations only and there has been no determination of liability.

Source: https://www.justice.gov/opa/pr/federal-contractor-agrees-pay-more-6-million-settle-overbilling-allegations

February 19, 2021 By cs

What to expect for False Claims Act enforcement under new Administration

Although Department of Justice (DOJ) recoveries under the False Claims Act (FCA) reached historic lows in FY2020, President Biden’s administration is poised to usher in a return to aggressive FCA enforcement.

Under President Obama, DOJ’s FCA recoveries hit all-time peaks, totaling over $5 billion in 2012, $6.1 billion in 2014, and $4.9 billion in 2016. From there, they trended consistently downward throughout the Trump Administration, averaging under $3 billion annually. Given the Biden Administration’s focus on tackling the COVID-19 pandemic and stimulating the economy, we anticipate that DOJ’s scrutiny of alleged fraud in government programs will be as probing as ever.

In the 1980s, then-Senator Biden supported the seminal 1986 amendments to the FCA, emphasizing in his Senate remarks that enforcement should enjoy bipartisan support: “Fraud against the Government is not a matter that ought to be used for political advantage. . . . It is not a matter that divides Democrats from Republicans.”

More recently, as Vice President under President Obama, Biden famously oversaw the 2009 Recovery Act in the wake of the 2008 financial crisis and touted the lower-than-average rate of fraud investigations into the stimulus spending. In 2011, he also led the Government Accountability and Transparency Board to advance efforts to detect and remediate fraud, waste, and abuse in federal programs as part of the “Campaign to Cut Waste.” When announcing this campaign, he underscored his commitment “to changing the way government works and . . . stepping up the hunt for misspent dollars.”

Keep reading this article at: https://www.mondaq.com/unitedstates/government-contracts-procurement-ppp/1035290/what-to-expect-for-false-claims-act-enforcement-under-the-biden-administration

January 27, 2021 By cs

Cybersecurity and government contracting: False Claims Act considerations

As the recent SolarWinds Orion attack makes clear, cybersecurity will be a focus in the coming years for both governmental and non-governmental entities alike.

In the federal contracting community, it has long been predicted that the government’s increased cybersecurity requirements will eventually lead to a corresponding increase in False Claims Act (FCA) litigation involving cybersecurity compliance. This prediction may soon be proven true, as a December 2020 speech from Deputy Assistant Attorney General Michael Granston specifically identified “cybersecurity related fraud” as an “area where we could see enhanced False Claims Act activity.”

This post discusses recent efforts to use the FCA to enforce cybersecurity compliance — and, based on those efforts, what government contractors may expect to see in the future.

In recent years, the government and qui tam plaintiffs have begun using the FCA to pursue alleged noncompliance with cybersecurity regulations, and some of these efforts have gained traction. For instance, in May 2019, a federal district court in California declined to dismiss a case alleging that a government contractor had falsely asserted its compliance with cybersecurity standards when entering into Department of Defense contracts. And in July 2019, the Department of Justice announced that another contractor had agreed to pay more than $8 million in connection with resolving a qui tam suit alleging failure to meet federal cybersecurity standards, marking the first settlement based on FCA allegations related to cybersecurity noncompliance.

More recently, however, at least one court rejected the attempt to build an FCA case out of alleged deviations from cybersecurity regulations.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2021/01/cybersecurity-and-government-contracting-false-claims-act-considerations/

January 8, 2021 By cs

Judge rules that lying about 8(a) eligibility violates False Claims Act

Another court has joined the growing chorus of judges who are singing the same tune on set-aside fraud: when a government contractor lies about its eligibility for a set-aside contract, it violates the False Claims Act, and can be sued by either the Department of Justice or a whistleblower.

The new case is United States ex rel. Montes v. Main Building Maintenance Inc., and the decision was issued on December 22, 2020, by Judge Jason Pulliam of the Western District of Texas.

This is a qui tam case brought under the False Claims Act by a whistleblower, or “relator” as it’s called under that statute. The relator alleges that two parents, Robert and Elvira Ximenes, created a company, JXM, to bid on government contracts reserved (or, in technical terms, “set aside”) for contractors that qualified for the so-called “8(a) Business Development program” for small businesses that are owned by “socially and economically disadvantaged people or entities.”

To qualify for such set-aside contracts, the business must first be “certified” as eligible by the Small Business Administration (SBA). And to be eligible for such certification, the business must make a series of representation to SBA about who both owns the business, and who controls the business.

Keep reading this article at: https://www.natlawreview.com/article/federal-judge-texas-rules-lying-about-eligibility-8a-business-development-program

December 22, 2020 By cs

Defense contractors charged and sentenced for Turkey-based defense contracting fraud scheme

Multiple defense contractors have been charged and/or sentenced for participating in a multi-million-dollar defense contracting fraud scheme based out of Turkey.

According to U.S. Attorney Byung J. (“BJay”) Pak, the charges, and other information presented in court:

Murat Gonenir, along with at least two other defendants, participated in an extensive Turkey-based scheme to defraud the U.S. military.
The defendants applied for and obtained access to a sensitive Department of Defense (DoD) contracting database housing some of the military’s most sensitive schematics, which is only lawfully accessible by U.S. and Canadian citizens or permanent residents.
Once the defendants obtained access to the database, they downloaded thousands of sensitive schematics for parts such as a handle casting for an 105 millimeter tray assembly for an AC-130H Gunship, and catapult/arresting gear for Nimitz and Forrestal Class aircraft carriers.
Gonenir obtained access to this sensitive database by falsely claiming he was a U.S. or Canadian citizen or permanent resident.
The defendants offered bids on numerous defense contracts for these sensitive schematics that required them to produce these parts in the United States. Instead, they produced these parts in Gonenir’s manufacturing plants in Turkey and then falsely claimed to the DoD that the parts had been lawfully produced in the United States.

The DoD paid millions of dollars to the various defense contractors who took part in this scheme as a result of these false statements.

DoD testing revealed that various parts produced at Gonenir’s plants were of such inferior design that they could have resulted in serious injury or death to U.S. military personnel if the parts had been put into production. Several members of the conspiracy were told that DoD testing had determined that at least one of the parts had failed inspection. However, the defendants kept producing parts in Turkey and falsely claiming the parts were produced in the United States.

The defendants and their sentences are as follows:

Murat Gonenir, 59, of Cankaya, Turkey was sentenced to three years, five months in prison and three years of supervised release, and he was ordered to pay $1,487,950.77 in restitution and a special assessment of $100.
Batur Ustol, 61, of Atlanta, Georgia, was sentenced to two years and six months in prison and three years of supervised release for his role in the conspiracy, and he was ordered to pay $100,000 in restitution and a special assessment of $100 in a related matter.
Suleyman Sevket Bayraktar, 43, of Fountain Valley, California, was sentenced to six months in prison, six months of home confinement, and three years of supervised release. He was also ordered to pay $161,925 in restitution and a special assessment of $100.

This case was investigated by the Department of Commerce’s Bureau of Industry & Security, the Federal Bureau of Investigation, and DoD’s Criminal Investigative Service.

Although Department of Justice (DOJ) recoveries under the False Claims Act (FCA) reached historic lows in FY2020, President Biden’s administration is poised to usher in a return to aggressive FCA enforcement.

As the recent SolarWinds Orion attack makes clear, cybersecurity will be a focus in the coming years for both governmental and non-governmental entities alike.

Another court has joined the growing chorus of judges who are singing the same tune on set-aside fraud: when a government contractor lies about its eligibility for a set-aside contract, it violates the False Claims Act, and can be sued by either the Department of Justice or a whistleblower.

Multiple defense contractors have been charged and/or sentenced for participating in a multi-million-dollar defense contracting fraud scheme based out of Turkey.

Search this Website