Government Contracts Fraud

July 25, 2016

Using the False Claims Act to Fight Defense Contract Fraud

It’s no secret that as a government fraud whistleblowers’ law firm, we are big fans of the False Claims Act (“FCA”). The FCA is a valuable tool that gives ordinary citizens the power to help fight back against frauds perpetrated on the federal government. While we often write about health care fraud matters, one of the most important things to know about the FCA is that it can apply to frauds involving a wide-range of subject matters. In these complex times, the FCA’s power is especially critical for fighting instances of defense contractor fraud.

Government Files Suit Alleging Defense Contractor Committed Fraud in Conjunction with Contract to Train Iraqi Civilian Police Forces

Last week, the Department of Justice (“DOJ”) issued a press release announcing that it had filed suit against DynCorp International Inc. (“DynCorp”), a government contractor headquartered in Northern Virginia, for allegedly submitting inflated claims for payment pursuant to a State Department contract. In 2004, the State Department awarded DynCorp a contract to train civilian police forces in Iraq and provide other services related to that effort. The government alleges that DynCorp knowingly permitted one of its main subcontractors to charge “excessive and unsubstantiated rates” for lodging, security, driving, and other services and that DynCorp included those charges in the claims for payment it submitted to the State Department. Additionally, the DOJ alleges that DynCorp added a markup to these already excessive charges that further inflated the amount charged.

July 11, 2016

Trends in False Claims Act Litigation: Individual Liability

by Gregory J. Brod

Regular readers of this blog know that part of what makes the False Claims Act such a powerful tool is its qui tam provision which allows individuals to bring claims for repayment on the government’s behalf. This is important because the government cannot police every single claim it pays and individuals who witness fraud and act on that knowledge are critical to the fight against fraud. A recent trend in litigation under the Act involves individuals in a very different sense – individual liability under the False Claims Act. Our whistleblowers’ law firm for fraud on the government is watching this trend and is prepared to help honest individuals fight fraud committed by both organizations and individuals.

DOJ Focuses in on Individual Liability for Corporate Wrongdoing

At the beginning of the year, Becker’s Hospital Review, a leader in healthcare industry information, published a piece entitled “5 False Claims Act Trends, Cases that will Fuel Recoveries in 2016.” One of the trends identified in this article is a “spotlight on individual liability” whereby the government is increasingly holding individuals, not just the companies they work for, liable for fraud. This stance grows, in part, out of a Department of Justice (“DOJ”) memorandum issued in September 2015 that discusses steps the DOJ is taking to increase legal accountability for individual corporate wrongdoing. One change announced in the memo is that corporations will only receive credit for cooperating with an investigation if they reveal the names of the individuals involved in the fraud.

June 27, 2016

The Escobar Decision: Whistleblowers’ Law Firm Applauds a Major Ruling from the Supreme Court Interpreting the False Claims Act

by Gregory J. Brod

The False Claims Act (“FCA” or “the Act”) is a powerful tool that allows private citizens to play a key role in fighting fraud on the federal government. As we have reported in previous blog posts, this term the Supreme Court agreed to look at a disagreement among appellate courts regarding the issue known as implied certification. Our whistleblowers’ law firm is pleased to report that the Court recently released a decision that affirms and strengthens the Act, ensuring it is available to fight a wide range of fraudulent acts.

Background: The Implied Certification Theory and the Escobar Case

As explained in The False Claims Act: A Primer, a guide released by the Department of Justice (“DOJ”), a person violates the FCA when they knowingly submit a false claim for payment to the government, knowingly cause another to submit a false claim, or knowingly create a false record/statement in order to induce the government to pay a false claim. The Act was originally passed during the Civil War. It underwent substantial revisions in the 1980s and again in 2009 and 2010.

June 20, 2016

Spotlight on Government Contract Fraud: The Violation of Small Business Set-Aside Provisions

by Gregory J. Brod

As a small law firm, we are particularly aware of the many contributions that small businesses and small business owners make to our economy. In our case, we believe being a small firm allows us to have a more personal touch and collaborate more closely with every client while providing top-notch legal services. There are also unique challenges to running a small business. One way that the government recognizes these important contributions and special challenges is by requiring that a certain percentage of federal contracts be awarded to small businesses. Sadly, some companies attempt to lie to the government and the American people by holding themselves out as small businesses when they truly do not qualify as such. This a form of fraud. Our government contract fraud lawyer is dedicated to partnering with honest individuals to protect the integrity of small business set-aside programs and ferret out other forms of fraud on the federal government.

Construction Company Pays $5.4 Million to Settle Government Contract Fraud Allegations

Earlier this month, the Times of San Diego reported that a California-based construction company paid $5.4 million to settle allegations of fraudulent billing for work performed at Camp Pendleton and other military bases. Harper Construction is a privately held company that earns a substantial share of its revenue through government contracts. As indicated in the report, Harper had contracts to construct facilities at the military bases and these contracts specifically required that Harper subcontract a specified portion of the work to small disadvantaged businesses. These requirements stem from government programs intended to ensure that such businesses receive a fair share of federal contract dollars. According to the article, Harper stood accused of knowingly using sham companies and falsely certifying that it complied with the small business subcontracting requirements. Instead of having legitimate small businesses perform the work, the lawsuit alleged that Harper actually passed the work to a large affiliate.

June 6, 2016

Government Contract Fraud: Using the False Claims Act to Fight Back Against Companies that Cheat the American People

by Gregory J. Brod

The government is, in many ways, a large business. Given its size and the breadth of its duties, the government relies on individuals and companies for a wide range of goods and services. However, because of the government’s special position, government contracts often contain clauses unique to agreements between the government and private entities. When contractors knowingly violate these clauses, they commit fraud. Government contract fraud is ultimately a fraud on all taxpayers and a way of stealing from already strained coffers needed for important services like education, health care, and national defense. Our government contract fraud law firm partners with whistleblowers to fight these wrongs.

$11.38 Million Settlement in Case Alleging Government Contract Fraud and Violation of Price Reduction Clause

On May 31, the Department of Justice (“DOJ”) issued a press release announcing that Deloitte Consulting LLP (“Deloitte”) has agreed to pay $11.38 million to settle claims it violated a pricing clause in its federal contracts. According to the government, the General Services Administration (“GSA”) awarded Deloitte a contract in 2000 pursuant to which the consulting company was to provide information technology services. Under the agreement, if Deloitte offered a lower price to specific commercial customers during the term of the contract, it was also required to reduce to price the company charged the government. In a lawsuit filed under the False Claims Act, the government alleged that Deloitte violated the price reduction clause between 2006 and 2012 and charged the government more than comparable commercial clients. It is important to note that the settlement is not an admission of wrongdoing.

May 30, 2016

Understanding the False Claims Act: Whistleblowers’ Law Firm Looks at Government Intervention

by Gregory J. Brod

The False Claims Act is a powerful weapon and, as we’ve talked about on this page numerous times, a large part of that power comes from the fact that ordinary citizens can use it to fight many forms of fraud on the United States government. After the initial filing of a whistleblower fraud claim, the government will eventually decide whether or not to intervene in the case. This is an important part of the process and our whistleblowers’ law firm knows that intervention in False Claims Act cases, such as recently occurred in a health care fraud suit, is often a positive sign. However, it is important to know that claims can be and are successful even absent government intervention.

The FCA and Intervention Generally

The False Claims Act (“FCA” or “the Act”) is a Civil War Era statute that was reenergized by a series of amendments in the 1980s. In short, a company or individual violates the Act when it defrauds the government, typically by overcharging the government or a government agency. Under 31 U.S.C. §3730(b), private citizens are given the power to bring FCA claims on the government’s behalf. These whistleblowers, also known as relators, are crucial since fraud by its nature is secretive and the government could not effectively fight fraud without the assistance of individuals who witness fraudulent acts. After the suit is filed, the government investigates the claim and then the Department of Justice (“DOJ”) decides whether or not it wants to take over the case. The decision to do so is known in legal circles as intervention.

May 9, 2016

The False Claims Act: What it Does and How Private Whistleblowers Can Use It

by Gregory J. Brod

We talk a lot about the False Claims Act (“FCA” or “the Act”)) on this blog. We do that because it is a powerful tool that allows ordinary Americans to take a stand and fight fraud. The frauds it fights are frauds perpetrated against the government and government programs, frauds that are ultimately crimes against the American people. Our posts often look at specific cases involving alleged violations of the FCA, but from time to time our whistleblowers’ law firm likes to take a step back and look at the FCA more generally to help our readers understand exactly what kind of wrongs the FCA tackles.

“A False or Fraudulent Claim”

The FCA is actually several sections of the United States Code, with 31 U.S.C. §3729 containing the basic description of what actions violate the Act. Although it is only one of a number of subsections that describe these actions, §3729(1)(a) explains the basic wrong the Act tackles “a false or fraudulent claim for payment or approval.” Essentially, this means that a person or entity is liable under the Act if they ask the government to pay an obligation that is not actually due or ask for more money than they are actually due.

April 25, 2016

Spotlight on FHA Mortgage Fraud: The Threat and How Private Citizens Can Fight Back with the Help of Our Mortgage Fraud Law Firm

by Gregory J. Brod

In addition to health care fraud and government contracts fraud, the False Claims Act is also essential in the fight against mortgage fraud. While it is a phrase that few of us knew 15 years ago, mortgage fraud exploded in the first decade of the new millennium and it continues to be a major threat to our nation’s economy. Individual whistleblowers, people who see fraud and speak up, are the key to fighting back and our mortgage fraud lawyer is proud to partner with them in this important battle.

A Brief Overview of Mortgage Fraud

Before diving into a recent case, some readers may find a brief definition of mortgage fraud helpful. In its Mortgage Fraud Overview, the Federal Bureau of Investigations (“FBI”) explains: “Mortgage fraud is a crime characterized by some type of material misstatement, misrepresentation, or omission on a loan which is then relied upon by a lender.” The FBI goes on to note that there are two broad categories of mortgage fraud: 1) Fraud for housing which is typically perpetrated by a borrower looking to acquire property and 2) Fraud for profit which is typically perpetrated by financial institutions and industry leaders. Our focus in this post is on the latter, also the type of fraud blamed for the subprime mortgage crisis.

April 18, 2016

Using the False Claims Act and State Equivalents to Protect Privacy and American Jobs

by Gregory J. Brod

Readers of this blog know that the False Claims Act and its state equivalents are powerful tools for fighting fraud on the government and, in turn, on taxpayers. One of the reasons these laws are so powerful is that they cover a wide-range of frauds. Although health care fraud is likely the most well-known wrong addressed through whistleblower litigation under the Acts, they cover a myriad of different subject matters as demonstrated by a recently settled case out of New York. While the case is largely about government contracting fraud, it touches on issues two of the most important business issues of recent decades: the outsourcing of American jobs and data privacy. Our False Claims Act law firm is encouraged to continue to see the power these laws give to ordinary people to tackle extraordinary issues (and, often, win!).

Settlement Filed in Case Against Government Contractor Who Sent Data and Jobs Overseas

Last month, the New York State Attorney General’s Office issued a press release announcing a $3.1 million settlement in a case accusing Focused Technology Imaging Services, LLC (“FTIS”) and two of its leaders of unlawfully outsourcing government-funded work to India. FTIS, a business located near Albany, entered into a $3.45 million agreement flag2 to digitize and index some 22 million fingerprint cards. FTIS also agreed to create a searchable database of the print cards for the New York State Division of Criminal Justice Services (“DCJS”) and the non-profit New York State Industries for the Disabled (“NYSID”) in the 2008-2009 timeframe. The fingerprint cards were used by a range of individuals from state employees to prisoners and arrestees and contained information including Social Security number, the reason for taking the fingerprint, the fingerprint itself, and other important personal information.

April 4, 2016

An Abuse of Trust: Colleges and Universities Committing Federal Grant Fraud

by Gregory J. Brod

Recently, our firm reported on the problem of institutions of higher learning abusing the public’s trust and breaking the law in connection with federal student loans and federal laws on student recruitment. Sadly, those are not the ways colleges and universities abuse and misuse federal taxpayer funds. Our education fraud attorney is closely monitoring developments involving federal education grant fraud. These frauds are a form of theft from the American taxpayers and they also divert money from important education and research programs.

School Agrees to Pay $4 Million to Settle Education Grant Fraud Claims

In March, a federal court sitting in Sacramento announced that Bard College agreed to pay $4 million to resolve claims initially raised by two former students who attended a Master of Arts program at Paramount Bard Academy in California via the False Claims Act’s (“FCA”) qui tam provisions. The government later intervened in the case. classroom The lawsuit alleged that Bard, a nonprofit school based in New York state, received funds from the Department of Education’s Teacher Quality Partnership Grant Program but failed to comply with the grant’s conditions. Additionally, the suit claimed that Bard abused Title IV student loan money by applying funds to campuses that had not yet received necessary accreditation. Although Bard agreed to pay to settle the case, it is important to note the school did not admit to the allegations in the complaint.