In a truly disheartening set of facts, California-based Veterans of the Land, Inc. allegedly falsely claimed status as a disabled veteran-owned small business, thereby making it eligible for certain government contracts expressly reserved for businesses owned and managed by disabled veterans of the U.S. military. In so doing, it unfairly and unlawfully deprived other disabled veteran service members from the opportunity to continue their service to the United States through the award of contracts for the maintenance of various national cemeteries and memorial sites.
The company, which claims to offer cemetery restoration and landscaping services, is based in Santa Marina and performed work primarily on the Riverside National Cemetery, among others.
The case was brought to light after a routine audit of the business, which revealed certain red flags about the company’s eligibility for enrollment in the program.
Under policies set forth by the Small Business Administration, a certain percentage of contract work must be set aside to benefit those American businesses owned by disabled service members. Falsely certifying one’s business as eligible, or setting up a sham subsidiary to win the contract, will typically result in liability under the False Claims Act, which imposes up to triple damage per infraction.
Details of the fraud scheme involving the cemetery restoration project
Beginning in 2008, Veterans of the Land, Inc. (VOTL) won a bid to complete several restoration projects at national cemeteries across the U.S. Most notably, the company was chosen to do the majority of restoration work at the Riverside National Cemetery, which honors those veterans of the Vietnam War. The contract continued until 2013, when a routine audit of the company by the Small Business Administration revealed red flags related to its ownership structure, which must be led by a disabled veteran of the U.S. military. More specifically, the owner of the company is alleged to have recruited a service-disabled family member to serve as a partner in the business for purposes of winning the bid. In reality, however, this family member lived full-time in Hawaii, did not participate in the daily operations of the business, and is believed to be a thinly-veiled stand-in used in order to win the lucrative government contracts.
As a result, the company agreed to pay $1 million back to the federal government to cover its damages as a result of the fraud. Consequently, the company went out of business and declared bankruptcy, as the settlement depleted all of its assets.
The Department of Veteran’s Affairs said in a statement, “This settlement demonstrates the Office of Inspector General’s continued commitment to aggressively pursue individuals and companies that misrepresent themselves as Service-Disabled Veteran-Owned Small Businesses and deny legitimate disabled veterans of the opportunity to compete for VA contracts. The VA OIG will continue to work these complex cases in order to protect the integrity of this program.”
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If you are aware of fraud against the U.S. government and would like to report your information confidentially and securely, please contact Berger Montague right away for information about how you can help prevent misconduct and preserve taxpayer dollars.