North Florida Shipyards Settle False Claims for $1M; Whistleblowers to Get $180K
North Florida Shipyards has agreed to pay the federal government $1 million to resolve allegations that it knowingly submitted or caused the submission of false claims to the Coast Guard, the U.S. Department of Justice announced earlier this week.
To qualify as a Service Disabled Veteran Owned Small Business (SDVOSB) on Coast Guard ship repair contracts, a company must be operated and managed by service disabled veterans and must perform at least 51 percent of the labor. The government alleged that North Florida created Ind-Mar Services Inc. merely as a contracting vehicle and that North Florida performed all the work and received all the profits. The government further alleged that if the Coast Guard and the Small Business Administration (SBA) had known that Ind-Mar was nothing but a front company, the Coast Guard would not have awarded it contracts to repair five ships.
In December 2013, the SBA suspended North Florida, Matt Self, Ind-Mar and three others from all government contracting. In April 2014, North Florida and Matt Self entered into an administrative agreement with the SBA in which they admitted to having created and operated Ind-Mar in violation of its Coast Guard contracts and SBA statutes and regulations.
The settlement resolves allegations originally filed in a lawsuit by Robert Hallstein and Earle Yerger under the qui tam, or whistleblower provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The act also allows the government to intervene and take over the action, as it did in this case. Hallstein and Yerger will receive $180,000.
The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments. We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud. Read more about our expertise in False Claims Act cases and how you can take action.