While healthcare fraud continues to remain one of the top issues facing the federal government’s H.E.A.T. task force, fraud involving technology and government contracting also sits atop the list of major affronts to taxpayers and government budgets. Just recently, the U.S. Department of Justice announced a $9 million settlement with a Virginia-based company known as Global Computer Enterprises, Inc. and its founder and CEO, Raed Muslimani, following a False Claims Act investigation into alleged violations of the terms of a contract for the provision of tech services to several high-security government agencies.
The company is based in the heart of the capital beltway and purports to specialize in “cloud solutions for financial management, acquisition management, asset management, and litigation and e-discovery.” While it also endures a Chapter 11 bankruptcy proceeding, the company opted to settle the claims pending against it, which included the alleged hiring of unqualified individuals to work on assignments under the government’s contracts beginning in 2008.
The investigation was commenced in response to several discrepancies in employment records, including issues arising with immigration officials.
Details of the allegations against Global Computer Enterprises, Inc.
The False Claims Act is often triggered by fraud within government contract work, and generally requires evidence that the contractor submitted invoices for payment despite actual knowledge (i.e., intent) that some sort of fraud or breach of contract was afoot.
In today’s case, GCE is alleged to have allowed undocumented workers, foreign nationals, and those without proper security clearances to work on highly-sensitive information technology projects pursuant to its contracts with the U.S. Coast Guard, Equal Employment Opportunity Commission, and the Department of Labor. Under the terms of these contracts, GCE was only permitted to use U.S. citizens or permanent residences – with heightened security clearances – to perform the work tasks. Employment of foreign nationals or other individuals without the necessary documentation was strictly forbidden under the terms of the agreement, primarily due to the sensitive nature of the information at hand.
The False Claims Act requires intentional conduct to trigger liability, as opposed to mere mistake or negligence. According to the allegations raised by the Department of Justice, the company knowingly and intentionally induced the government to enter into the service contract on the basis that its employees were U.S. citizens or permanent residents, when it actually knew that many of the professionals expected to perform under the agreement did not meet these classification requirements.
In 2013, the Department of Labor launched an independent investigation into the employment practices underfoot within GCE. At this time, massive financial difficulties were revealed and the company thereafter filed for Chapter 11 bankruptcy protection. In 2014, the federal government had to pay $23 million to recover its data and financial systems information from the company. The $9 million settlement is to derive from the company’s bankruptcy proceeds, and it still reportedly owed money to over 150 other companies and individuals.
The company and its founder – who was held individually liable – did not admit liability in the matter.
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