Thermacore, Inc. Settles False Claims Act Allegations for Nearly $1 Million

A thermal engineering firm has agreed to pay $965,000 to settle allegations of duplicative proposals to the Small Business Innovation Research Program.
Image source: Wikimedia Commons

The commission of fraud with federal or state grant money is an emerging issue gathering increasing exposure. Federal grants, which are funded by taxpayer dollars, are awarded to certain individuals and corporations after a lengthy review process. This money is not considered a loan, and is generally not to be repaid assuming the terms and conditions of the grant are met. Any grant recipient engaging in fraud, misspending, or waste of grant money could face significant False Claims Act liability.

Details of case against Thermacore, Inc.

Thermacore, Inc. is a Lancaster, Pennsylvania-based company specializing in “thermal management solutions,” including conduction, engineering, heat pipes, and research and development of thermal solutions. The company acquired k Technology Corporation (kTC) in 2009 to expand its advanced solid conduction products using kTC’s patented k-Core heat transfer system.

The federal government maintains a highly-competitive program known as the Small Business Innovation Research Program. According to its mission statement, the SBIR Program is designed to “support scientific excellence and technological innovation through the investment of Federal research funds in critical American priorities to build a strong national economy.” In other words, the SBIR Program provides small business with capital to expand and grow its prototypes under the expectation the company will thereafter be able to commercially market its innovations and enhance the economy.

According to allegations, Thermacore’s acquisition of kTC triggered False Claims Act liability due to the fact kTC had unlawfully submitted two proposals for funding through the SBIR – one targeting NASA, the other targeting the United States Air Force. In order to avoid waste, fraud, and abuse, both agencies maintain policies that prohibit the provision of funding for projects involving substantially similar research. As such, applicants for funding must certify that their submissions are non-duplicative. Following a detailed investigation by NASA, the Air Force, and the Department of Defense, the proposals were uncovered and referred to the relevant U.S. Attorney’s Office.

Details of settlement agreement

Thermacore has agreed to pay a $500,000 fine to the federal government, as well as remit $465,000 to improve its compliance system. More specifically, Thermacore is required to hire a Contract Administrator to oversee the application process for federal grant money and contracts with various federal agencies – ensuring that all compliance measures are met. It is further required to routinely report to the U.S. Attorney’s Office with a detailed report of its compliance efforts, employee training procedures, and any hotline reports made in the previous year.

This case did not involve the efforts of a whistleblower; however, fraud with grant money or defense contracts is an ongoing problem in the United States and whistleblowers are encouraged to report their information as quickly as possible.

Contact Berger Montague today

If you are aware of fraud or misuse of federal grant money, please contact us right away. A whistleblower attorney can help stop the wasteful spending and eliminate the costly form of fraud. Moreover, a whistleblower lawsuit can result in a reward of up to 30 percent of the ultimate recovery. Contact us today for more information.

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By | 2018-03-26T09:17:15+00:00 October 31st, 2014|Grant Fraud|