February 8, 2013
The State of New York has reached a settlement with a Lindenhurst construction contractor and its executives for violations of the New York False Claims Act. Between 2006 and 2008, the New York Office of General Services hired the Lin-Kim Company several times to provide emergency construction repair work at two upstate prisons — the Arthur Kill Correctional Facility and the Otisville Correctional Facility. According to an article on LoanSafe.org dated January 11, 2013, an investigation by the New York Attorney General’s office revealed that Lin-Kim overcharged the state by around $195,000 in connection with the work. Most of Lin-Kim’s false claims were made regarding the Otisville facility in Orange County. The company devised various means for presenting its false claims, including the intentional misclassification of low-wage work as skilled labor, which was billed at a higher rate.
To settle the False Claims Act charges, the Lin-Kim Company, Linda Gregorio (president), Kenneth Buddenhagen (vice-president) and Melissa Peters (secretary and bookkeeper) have consented to pay $390,000 — double the amount of actual damages. In addition, the company and its officers will be barred from ever working on state contracts in the future.
Under New York’s False Claims Act, the state is entitled to collect triple damages and fines from those who defraud the state government or fail to pay amounts owed to government entities.
At least 29 states have their own False Claims Act. Most of the state statutes are patterned after the federal False Claims Act, and contain qui tam provisions allowing individual whistleblowers to bring claims on the state’s behalf. Each of the State False Claims Acts differ from the federal Act. An experienced whistleblower lawyer can help you sort out the differences. Additionally, he or she can help coordinate litigation when federal and state governments are involved, along with federal and state laws.
Regardless of which law applies to a False Claims Act construction fraud case, employee informants inside a construction company are frequently the ones to discover unethical conduct and to notify the government. It can be difficult to come forward, especially when contractors pressure their employees to participate. Contractor employees may receive financial incentives to bilk the state government. Accounting personnel and bookkeepers may be instructed to carry out suspicious billing practices.
To encourage tipsters to collaborate with the state government, the qui tam provisions of many state statutes permit an insider to file a lawsuit on the state’s behalf and keep a share of any recovery.
Before stepping forward, whistleblowers should know their rights. The lawyers at Waters & Kraus are prepared to offer state government collaborators the legal representation they need and deserve. Contact us or call our whistleblower attorneys at 800.226.9880 to find out more about our state False Claims Act practice and how we can help employee insiders.
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