March 13, 2013 — It is a violation of the False Claims Act for government contractors to pay kickbacks on work that is billed to the United States government. Kickback schemes are frequently uncovered by accounting employees who see that something in the books just is not adding up. Sometimes, unscrupulous government contractors pay employees to remain silent or threaten workers with the loss of their jobs. When they’ve had enough, some employees decide to notify the government rather than participate in a fraud.
False Claims Act Prohibits Kickbacks for Government Contractors
According to the Justice Department, Donald Gene Garst of Topeka, Kansas worked for a Department of Defense private contracting company. The company was hired to find, evaluate, and monitor subcontracts that the U.S. government awarded to local companies in Afghanistan for work at Bagram Airfield. Between 2009 and 2011, Garst engaged in a kickback scheme with Somo Logistics, an Afghan construction company. As part of the scheme, Garst would receive a kickback each time he favored Somo Logistics in the contracting process.
The first alleged kickback was in December 2010 for $60,000, which Garst received for helping Somo Logistics obtain a subcontract for the lease of heavy equipment for use in construction on Bagram Airfield. The second kickback was in May 2011 for $150,000 in connection with the lease of heavy construction equipment. The third subcontract on which Garst was to receive a $400,000 kickback was foiled when law enforcement agents discovered the scheme before Garst was paid.
Garst has been sentenced to spend thirty months in prison in connection with the kickback scheme. He was also ordered to pay a fine of $52,117. He had already forfeited the $150,000 he tried to smuggle back into the United States from Afghanistan.
Employee Informants Use False Claims Act to Combat Fraud
In many cases where the American taxpayers are in essence paying for illegal kickbacks involving government contractors, the disclosure is made by an insider employee working for the contractor. The federal False Claims Act allows a tipster to bring a lawsuit on the government’s behalf and then collect a share of any recovery that results. The anti-fraud statute’s qui tam provisions reward informants with the courage to tell the truth.
Government collaborators deserve to understand their legal rights up front. The lawyers at Waters & Kraus have experience in representing whistleblowers in government contractor fraud cases. Contact us or call our whistleblower attorneys at 855.784.0268 to learn how we can protect and assist you.