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Oklahoma False Claims Act Suit Involving Reclamation of Mining Site Unsealed

May 7, 2013 — The False Claims Act allows the federal government to fight all sorts of fraud, including fraud in the payment of government contractors who are supposed to be helping to clean up environmental disasters — like the Tar Creek mining site in Oklahoma. The whistleblower statute’s qui tam provisions enable insider employees and others to file a lawsuit for the benefit of the government and then keep a share of any financial recovery made by the government. Tipsters typically are given between 15 and 25 percent of the government’s settlement or judgment.

LICRAT Trustees Alleged to Pay 200 False Claims for Housing Demolition

Two whistleblowers have filed a False Claims Act lawsuit in federal court in Oklahoma, alleging a conspiracy involving the Lead-Impacted Communities Relocation Assistance Trust (LICRAT). The lawsuit alleges that trustees and contractors caused more than 200 false claims to be submitted for reimbursement to LICRAT.

Tar Creek in Ottawa County, Oklahoma is an Environmental Protection Agency (EPA) Superfund site. It is located in a former zinc and lead mining district near the point where Oklahoma, Missouri, and Kansas meet. The area has been so contaminated by mining waste, the elevated levels of zinc, lead, and cadmium have polluted the soil and water. The towns affected include Cardin, Picher, and Hockerville, as well as North Miami, Commerce, and Quapaw.

LICRAT was established in 2009 with over $15 million from the EPA to fund the purchase of contaminated homes and the relocation of residents who once lived in the former mining communities. The lawsuit alleges that LICRAT funds were used to pay more than 200 phony claims for abatement, mobilization, demolition, bonds and insurance, metal sorting, transportation, and dumping fees.

According to the suit, LICRAT trustees relied on a “good ol’ boy” network to engage in bid-rigging with contractors and consultants to boost the value of contracts from $1,701,752 to $3,050,785. The suit alleges that many false claims for payment were submitted on work that was never performed. One example, claims the lawsuit, is the “Mickey Mantle Marriage House,” where baseball’s Commerce Comet married Merlyn Johnson in 1951. Though the house was purchased from LICRAT in 2011 by the Commerce Sports Authority for preservation, the False Claims Act suit alleges that LICRAT paid a local contractor for demolishing the house.

The Oklahoma State Auditor and Investigator’s Office is in the midst of an audit of the contracts among LICRAT and the contractors and consultants hired by LICRAT trustees who are named in the whistleblower case, reports the Joplin Globe.

False Claims Act Violations Frequently Reported by Insiders

False claims schemes are frequently exposed by inside informants working for the government contractors involved. Before notifying the government, however, these brave individuals deserve to understand their legal rights under the whistleblower statute. The qui tam lawyers with Waters & Kraus provide government collaborators with the legal guidance they need to make a difference. Contact us by email or call our False Claims Act attorneys at 855.784.0268 to discuss how we can protect your interests.

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