2013 False Claims Act Cases

 

In 2013 the U.S. government recovered $3,009,262,541 from False Claims Act whistleblower cases.The cases collected below account for $46,423,000 of the overall amount recovered. The whistleblowers involved in these cases were awarded more than $7,212,000.

The cases presented here do not include any of the medical related (pharmaceutical companies, physicians, Medicare, etc..) False Claims Act cases from 2013.

Read the cases below for more information

Whistleblower Stops False Customs Declarations

November 14, 2013:  Basco Manufacturing Co. (Basco) has agreed to pay $1.1 million to resolve allegations that it violated the False Claims Act by making false customs declarations to avoid paying duties on products imported from a Chinese manufacturer. The company made such declarations to avoid paying antidumping and countervailing duties.

The information against Basco was brought forth by whistleblower James F. Valenti who will be awarded a share of the settlement in recognition of his instrumental role in the case and the risks he took coming forward. Read the DOJ Press Release
 
Whistleblower Reveals that FreshPoint Inc. Overcharged the Department of Defense
November 19, 2013:  FreshPoint Inc., a food distribution company, has agreed to pay $4.2 million to resolve allegations that it violated the False Claims Act by overcharging Department of Defense for for fresh fruits and vegetables purchased under fifteen separate contracts. 

The Whistleblower in this case, former FreshPoint employee Charles Hall, courageously divulged these transgressions.  Hall risked his livelihood and his job for the benefit of the others and for such actions has been awarded $798,000. Read the DOJ Press Release

Whistleblower Uncover Businessman's False Claims in Regard to the E-Rate Program

August 6, 2013:  Larry Lehman, the CEO and managing partner of Acclaim Professional Services, has agreed to pay $400,000 to settle allegations that he violated the False Claims Act in connection with the Federal Communications Commission's to E-Rate Program. Lehmann provided gifts and loans in order to get an E-Rate contract and helped devise a scheme in which the Houston Independent School District (Beneficiary of the E-Rate Program) outsourced employees to Acclaim while passing the costs onto the E-rate Program.
These violations to the False Claims Act were  reported under the Whistleblower or qui tam provision of the False Claims Act by Dave Richardson and Dave Gillis. Gillis and Richardson investigated improprieties based on Richardson's experience bidding for contracts at HISD and DISD. In acknowledgment of the vital role they placed in the case, the two whistleblowers received a share of the settlement.

Read the DOJ Press Release

Whistleblowers End Education System Scam
August 22, 2013:  ATI Enterprises Inc. will pay $3.7 million to resolve False Claims Act allegations that it falsely certified compliance with federal student aid programs' eligibility requirements and submitted claims for ineligible students. The company misrepresented its job placement statistics to maintain its state license and accreditation. Company employees also engaged in fraudulent practices to induce students to enroll and maintain their enrollment in the schools. The settlement resolves two separate complaints against ATI Enterprises Inc., both of which were filed under the False Claims Act's qui tam, or whistleblower, provisions. For aiding in revealing ATI Enterprises Inc.'s fraudulent behavior, the whistleblowers received a share of the settlement.

Read the DOJ Press Release

Whistleblower Reveals that Conax Florida Corporation Knowingly Misinformed Military and NASA

August 29, 2013:  Conax Florida Corp. and related companies have agreed to resolve  False Claims Act allegations that they submitted false claims to the government for improperly tested inertia reels and non-conforming voltage references. These parts are used in parachutes and in harnesses used to protect aircrew members in the event of a crash. 

Mark Hansson and Steven Schummer, former employees of Conax, originally filed the case under the qui tam provisions of the False Claims Act. For risking their livelihoods and careers to bring these safety issues to light, the two whistleblowers received $810,478 from the settlement.

Read the DOJ Press Release

Science Applications International Corporation Dishonestly Gets Government Contract

July 3, 2013:  Science Applications International Corporation (SAIC) has agreed to pay $5.75 million to settle allegations that it violated the False Claims Act by submitting claims under a contract with the General Services Administration (GSA) that it knew had been awarded in violation of federal procurement regulations. SAIC personnel provided false information to GSA contracting officials to induce them to award a blanket purchase agreement to SAIC. In particular, the company caused an individual to falsely represent himself as an employee of the Senior Executive Staff of the Department of Defense.

The lawsuit against SAIC was filed under the whistleblower provisions of the False Claims Act by Timothy Ferner, a retired Lt. Colonel in the U.S. Air Force. In recognition of his role in the case as well as his potential loss of career and livelihood, he was awarded $977,500 from the settlement.

Read the DOJ Press Release

Former Executives Reveal Company Was Dishonest With U.S. Army
July 2, 2013:  CyTerra Corporation has agreed to pay $1.9 million to resolve civil liability arising from its failure to provide the U.S. Department of the Army with accurate, complete and current cost or pricing data for its sales of mine detectors.

Two former CyTerra executives originally filed the lawsuit under the qui tam, or whistleblower, provisions of the False Claims Act. They received $361,000 from the settlement for helping to expose CyTerra Corporation's violations. Read the DOJ Press Release

Whistleblower Discovers General Electric Aviation Systems False Claims Violations
June 26, 2013:  General Electric Aviation Systems (GEAS) has agreed to pay $6.58 million to settle allegations that it submitted false claims in connection with multiple Department of Defense contracts. GEAS knowingly failed to comply with contract specifications and did not undertake proper quality control procedures. 

The case was originally filed by a whistleblower under the qui tam provisions of the False Claims Act. In acknowledgment of their role, the whistleblower in the case received a portion of the settlement. Read the DOJ Press Release

Whistleblower Case Ends Abuse of The Disadvantaged Business Enterprises Program
June 6, 2013:  TesTech and CESO, as well as their respective owners, have agreed to pay $2,883,947 to resolve allegations that they falsely claimed disadvantaged business status on a number of federally funded transportation projects. TesTech is owned and controlled by CESO, a non-DBE (Disadvantaged Business Enterprises) firm, and its owners, who falsely claimed that TesTech was owned by someone else and therefore qualified as a minority-owned business so that they could take advantage of the DBE program.

The lawsuit was originally filed under the False Claims Act by Ryan Parker, a former TesTech employee. Mr. Parker received $562,370 in recognition of his instrumental role in the case. Read the DOJ Press Release

For-Profit College Scam Exposed by Whistleblowers
May 31, 2013:  American Commercial Colleges Inc. (ACC) has agreed to pay up to $2.5 million, plus interest, to resolve allegations that it violated the False Claims Act by falsely certifying that it complied with certain eligibility requirements of the federal student aid programs. To maintain eligibility to participate in certain federal student aid programs, for-profit colleges must obtain no more than ninety percent of their annual revenues from Title IV student aid programs. At least ten percent of their revenues must come from other sources. ACC violated the False Claims Act by orchestrating certain short-term private student loans for the sole purpose of manipulating its 90/10 Rule calculations.
The case against ACC was originally brought forward by Shawn Clark and Juan Delgado, former directors of ACC campuses, under the qui tam provision of the False Claims Act. In acknowledgment of the risks they took in coming forward with this information, the two whistleblowers were awarded $170,000 of the settlement and will receive an additional $255,000 if ACC becomes obliged to pay the maximum $1.5 million contingent portion of the settlement.

Read the DOJ Press Release

Sales Representative Uncovers Kickback Scheme for CIA Contract

March 7, 2013:  American Systems Corporation, Anixter International Inc., and Corning Cable Systems LLC have agreed to pay $3 million to settle allegations that they violated the False Claims Act and the Anti-Kickback Act in bidding on a contract with the CIA. The three companies provided gratuities, including meals, entertainment, gifts and tickets to sporting and other events, to CIA employees and outside consultants in order to influence contract specifications that would favor the three companies in the award of the contract.

William Jones, a former Anixter sales representative, filed the lawsuit under the qui tam, or whistleblower, provisions of the False Claims Act. In recognition of his important role in helping hold these companies accountable, as well as his potential loss of career and livelihood, he was awarded $585,000 from the settlement.

Read the DOJ Press Release 

Whistleblower Reveals Corning Incorporated Deceived U.S. Government
March 8, 2013:  Corning Incorporated has agreed to pay $5.65 million to resolve claims that is knowingly presented false claims to the United States for laboratory research products sold to federal agencies through Corning's Life Sciences division. Corning knowingly failed to meet its contractual obligations to provide GSA with current, accurate, and complete information about its commercial sales practices, including discounts offered to other customers. The company also lied to the GSA about its sales practices and discounts, which caused the United States government to receive lower discounts and ultimately pay far more than it should have for Corning products.

A former Coning Life Sciences sales representative, Kevin Jones, originally filed the case under the qui tam, or whistleblower, provisions of the False Claims Act. He was awarded $904,000 from the overall settlement in recognition of the risks he faced in coming forward.

Read the DOJ Press Release

Company Ousted for Scamming Government by Former Sales Representative
March 29, 2013:  CDW-Government LLC (CDW-G) has agreed to pay $5.66 million to resolve allegations that it submitted false claims in connection with a U.S. General Services Administration (GSA) contract. The company improperly charged government purchasers for shipping sold products to the United States that were manufactured in countries prohibited by the Trade Agreements Act. CDW-G also underreported sales in order to avoid paying GSA its "Industrial Funding Fee".

Former CDW-G sales representative Joe Liotine originally filed the case under the qui tam, or whistleblower, provisions of the False Claims Act. He received $1,585,892.56 of the total recovery for his role in the case as well as in acknowledgment of the risks he took in coming forward.

Read the DOJ Press Release

Whistleblower Uncovers Company Using Federal Funds for Lobbying
April 3, 2013:  Fluor Hanford LLC has agreed to pay $1.1 million to settle allegations that they violated the False Claims Act by using federal funds for lobbying. The company was contracted by the Department of Energy to operate the Hazardous Materials Management and Emergency Response (HAMMER) center. During this time, Flour used Department of Energy funds to lobby Congress and other federal officials to increase funding for the HAMMER center. This violates the Byrd Amendment.

Loydene Rambo, a former employee of Fluor, filed the lawsuit against the company under the whistleblower provisions of the False Claims Act. Rambo was awarded $200,000 of the overall settlement for risking career and livelihood to bring this information to light.

Read the DOJ Press Release