ATTORNEY NEWSLETTER
Fraudulent Small Business Loan Application Alleged
Accusations Of Illegal Kickbacks
How Whistleblower Cases Work
Government contracts and government-backed loans and grants typically include strict rules regarding program eligibility. Knowing filings of false eligibility certifications or loan or grant applications or failure to fulfill contractual obligations or falsely representing compliance with government regulations all may violate the False Claims Act. See False Claims Act (FCA), 31 U.S.C. §§ 3729 et seq. Businesses or contractors may knowingly misrepresent their eligibility for grants compliance with regulatory requirements, fail to test, or deviate from the specifications for finished goods in order to reduce costs and increase profits on the contracted job. Individuals with knowledge of this kind of fraud, often employees or former employees of the offending contractor, may bring an action (called a “qui tam” case) on behalf of the government for the fraud perpetrated against the government. Rewards for the individuals (referred to as “relators”) bringing the actions can equal 15-30% of the amount recovered. 31 U.S.C. § 3730(d). If you have credible information for a false claims whistleblower case on behalf of the federal government in San Francisco or elsewhere in California, call us today at (415)441-8669 and we can help. Our toll-free number is 1-888-50EVANS (888-503-8267).
Recent Settlement[1]
The U.S. Department of Justice (DOJ) recently announced that a company and two individuals agreed to pay $221,000 to settle allegations that they violated the False Claims Act by fraudulently obtaining small business set-aside contracts. The settlement further resolves allegations that defendants violated the Anti-Kickback Act.
The settlement resolves allegations that between 2016 and 2023, defendants falsely represented that the business they ran was a Woman-Owned Small Business (WOSB) and a Service-Disabled Veteran Owned Small Business (SDVOSB). They made these false claims to obtain small business set-aside contracts awards from the Department of Homeland Security (DHS) for security services at federal buildings. The company the individuals ran was a purported small business subcontractor to one of the federal government’s largest security guard providers at federal buildings throughout the U.S. The U.S. alleged that the larger security services provider acting through former high-ranking corporate executives, knowingly engaged in a fraudulent scheme to use purported small businesses that it controlled, such as defendant’s business, to obtain DHS set-aside contracts for which the larger company was itself ineligible.
This settlement also resolves allegations that defendants provided more than $188,000 in kickbacks to the larger company’s executives and that they in turn received $98,000 in kickbacks from another subcontractor. In November 2024, the United States resolved related civil claims against the large security services provider, recovering $52 million. Additionally,
Starting A Qui Tam Action
Any False Claims Act whistleblower case begins by a relator filing a complaint under seal in the federal court usually for the United States District Court for the district where defendant is located or does business. At the same time, the relator submits a disclosure to the DOJ outlining the material evidence the relator has of the alleged false claims. 31 U.S.C. § 3730(b). The seal period of the complaint lasts 60 days during which the DOJ investigates the claims. 31 U.S.C. § 3730(b)(2). (If necessary, the government can, and often does, extend the 60-day period during which the allegations are kept under seal.) If the government decides to intervene in the case, the government essentially takes over the litigation. 31 U.S.C. § 3730(c)(1). If the government declines to intervene, the relator may proceed with the litigation on his or her own. 31 U.S.C. § 3730(c)(3).
Contact Us
If you have credible information of government fraud in San Francisco or elsewhere in California, call Ingrid M. Evans at (415) 441-8669, or toll-free at 1-888-50EVANS (888-503-8267) or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. In addition to FCA and CFCA whistleblower cases, Ingrid and Evans Law Firm, Inc. also handle bank fraud whistleblower cases under FIRREA/FIAFEA, commodity trading and securities fraud under the Commodities Futures Trading Commission Whistleblower Program and the Securities and Exchange Commission Whistleblower Program, and tax fraud under the Internal Revenue Service Whistleblower Program.
[1] Evans Law Firm, Inc. was not involved in the case in any way.
