June 26, 2013 — Government contractors that file false claims with the government, pretending to be something they are not, violate the federal False Claims Act. The qui tam provisions of the anti-fraud statute reward whistleblowers who are brave enough to take steps to stop the fraud. The federal False Claims Act enables an informant to file a lawsuit on the government’s behalf and then participate in the resulting recovery. Many company insiders, of course, are afraid to risk losing their jobs — particularly when business owners are aware of, or even involved in, the fraud.
Ohio Construction Companies Allegedly Misrepresented Disadvantaged Business Status
The Disadvantaged Business Enterprise (DBE) program operated by the U.S. Department of Transportation was established to encourage contractors to use minority- and woman-owned businesses on transportation projects funded by the federal government. To receive federal funding, contractors are obligated to make good-faith efforts to satisfy participation goals set by the DBE program. The U.S. Department of Justice has reached a settlement in the amount of $2,883,947 in a False Claims Act lawsuit alleging that several related individuals and businesses made false claims for reimbursement on federally-funded transportation projects by claiming that they qualified for minority-owned contractor status when they did not. The people and entities involved include:
- TesTech, Inc.;
- Sherif Aziz, Testech’s owner;
- CESO Testing Technology, Inc.;
- CESO International, LLC;
- CESO, Inc.; and
- David and Shery Oakes, owners of the CESO entities.
According to the Justice Department, the defendants claimed that TesTech, a civil engineering firm, was owned by Aziz and therefore qualified as a minority-owned business under the DBE program. In reality, alleged the government, TesTech was owned and operated by CESO, which was not a DBE firm, and the Oakes, who also do not qualify under the DBE program. The defendants allegedly made the false claims in order to win contracts on many airport and highway construction projects in Ohio, Michigan, Indiana, and Kentucky.
The allegations were first made against the defendants in a False Claims Act lawsuit filed by Ryan Parker, who used to work for TesTech. Under the qui tam provisions of the False Claims Act, Mr. Parker will receive $562,370 as a result of his collaboration with the government.
Tipsters Fight Fraud With False Claims Act
Informants with information about False Claims Act violations deserve to understand their rights from the beginning. The qui tam lawyers at Waters & Kraus have long experience in representing employee insiders in government contractor fraud cases. Contact us by email or phone our whistleblower attorneys at 855.784.0268 to discuss how we can protect and assist you.