May 6, 2014 — When military contractors file false claims with the government to obtain public funds or secure the right to work on local and federal projects, this is procurement fraud. American taxpayers foot the bill for these scams. Construction subcontractors without the integrity to honor regulations governing federal programs should be held accountable. Insider employees are often the first to spot False Claims Act violations. The statute gives conscientious whistleblowers the means to file a lawsuit on the government’s behalf. To reward tipsters who come forward, the qui tam language in the Act gives informants a share of any recovery.
Masonry Subcontractors Falsely Claimed to be Disadvantaged Small Businesses to Obtain Government Contracts
Five California masonry contractors with government contracts to build facilities for the Marines at Camp Pendleton in southern California and Camp Lejeune in North Carolina have settled False Claims Act lawsuits in which they were named as defendants. The whistleblower lawsuits alleged that the contractors falsely claimed that they were disadvantaged small businesses in their effort to win the competitive government contracts. In addition to the five contractors — CTI Concrete & Masonry Inc., Frazier Masonry Corp., F-Y Inc., Masonry Technology Inc. and Masonry Works Inc. — two individuals also settled the government’s allegations against them, Robert Yowell and Russell Frazier. The defendants collectively paid almost $1.9 million to put the lawsuits to rest, according to the U.S. Justice Department.
Military contractors must follow the Small Business Administration’s rules mandating that a certain percentage of the work on government contracts be performed by small businesses owned by minorities, women and other disadvantaged populations. But in this case, the California masonry subcontractors and their principals told the prime contractors that they were qualifying small businesses, even though this was not the case. The misrepresentations led the prime contractors to make false claims of program compliance when seeking payment from the government under the contracts.
The whistleblower in the two lawsuits is Rickey Howard, who was formerly employed by Frazier Masonry Corp. Under the qui tam provisions of the False Claims Act, Howard’s portion of the government’s recovery is $393,383.
Collaborating to Thwart Construction Subcontractors Filing False Claims With The Government
The qui tam lawyers with Waters & Kraus realize the immense pressure that whistleblowers feel from their employers to keep quiet about scams that cheat the American taxpayers. We’ve counseled many tipsters in circumstances similar to yours. With whistleblower lawyers in California, where some of the misconduct in this case occurred, and in Texas and Maryland, we’re available nationwide to protect your interests throughout the qui tam process. Contact us by email or phone our False Claims Act attorneys at 855.784.0268.