Veteran Construction Associates Settles False Veteran Status Claim

Under the federal False Claims Act, it is unlawful for individuals and businesses to submit claims for reimbursement or funding based on fraudulent, falsified, or exaggerated facts. If a company submits improper claims and evidence shows there was intent to defraud (as opposed to accidental fraud), the business may have to pay up to three times the actual financial damages plus statutory damages.

The False Claims Act allows private citizens, referred to as whistleblowers or relators, to file lawsuits alleging fraudulent misconduct. The government may join the lawsuit, at its discretion. For their part in exposing fraud against the government, a relator may receive up to 30% of any recovery made on behalf of the government.

As this blog has revealed, misconduct under the False Claims Act most often falls under the category of Medicare or Medicaid fraud or fraud against the Department of Health and Human Services. However, the False Claim Act only covers a small range of potentially fraudulent activity against the government and scammers are developing new ways to defraud U.S. taxpayers every day.

In today’s case, we examine a recent $1.3 million settlement between a New Jersey-based construction company and the United States Department of Veteran Affairs. The VA established several programs to benefit small businesses owned by disabled veterans and it was these programs the accused used to defraud the government.

Details of the case against Veteran Construction Associates

The facts of this False Claims Act settlement are particularly unsavory, including the falsification of required certifications naming a business owner as a disabled veteran when, in fact, he was not. According to the allegations, Veteran Construction Associates listed its majority equity owner as a veteran disabled by a service-related injury. This false claim allowed the company to procure over $6 million in federal government contracts for construction work.

The government sets aside a limited number of lucrative contract opportunities across several different industries solely for disabled veterans. By defrauding this program, the defendants – who admitted liability for their actions – not only ripped off U.S. taxpayers, but potentially denied other disabled veterans from the opportunity to obtain government contracts. In reality, the service-disabled veteran listed as the owner was not an owner at all and the true owner of Veteran Construction Associates were several non-veteran, non-disabled individuals.

The government’s response

Government officials worked to bring the fraudsters to justice and have banned Veteran Construction Associates from procuring contracts through the Department of Veteran Affairs for a period of three years. The U.S. Attorney’s Office in New Jersey commented, “The settlement resolves allegations that Veteran Construction was not owned and controlled by a service-disabled veteran, and thus should neither have received the government contracts, nor invoiced the government for work performed on those contracts….”

This the second veteran fraud case in New Jersey over the past year, and the accused in that case served eight months in jail for falsely claiming her business was owned by a disabled veteran and obtaining nearly $1.2 million in federal contracts.

Contact Berger Montague today

If you are aware of fraud under a government contract or believe your employer may be unlawfully obtaining federal funds, please contact an experienced whistleblower attorney at Berger Montague today.