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NY Sub Agrees to Pay $3.13M in Fines

Thursday, November 19, 2020

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Recently, the­ United States Attorney's Office for the District of Massachusetts announced that VJ Associates, a group of companies based in Hicksville, New York, had agreed to pay $3.13 million to resolve criminal and civil charges relating to a long-running overbilling scheme involving numerous government-funded construction projects in Massachusetts and New York.

“VJ Associates defrauded government-funded infrastructure projects by billing for bogus hours, adding hundreds of thousands in unnecessary costs to projects on which it worked,” said United States Attorney Andrew E. Lelling.

“Our office is committed to protecting taxpayer dollars and the integrity of federally funded infrastructure programs, and today’s resolution is another example of how we will continue to use our criminal and civil authority to ensure that government contractors are honest, upstanding corporations that do not waste federal monies.”

What Happened

According to the release, from at least January 2007 through August 2018, VJ Associates conspired with other VJ Associates entities and employees to write up false bills on sub-contracted estimating and scheduling services funded by the Department of Transportation, the State of New York and the Commonwealth of Massachusetts.

Marilyn Nieves / Getty Images

Recently, the­ United States Attorney's Office for the District of Massachusetts announced that VJ Associates, a group of companies based in Hicksville, New York, had agreed to pay $3.13 million to resolve criminal and civil charges relating to a long-running overbilling scheme involving numerous government-funded construction projects in Massachusetts and New York.

Services included forecasting costs and resources to complete a project and estimating the time necessary to complete milestones in a project.

Forms of improper billing included hours employees spent working on unrelated projects, time spent on administrative tasks and time doing no work. It was also noted in the release, that under pressure from management, employees openly discussed improper billings as “juicing” and “tagging” hours in order to “maximize” bills on government projects.

As a result of the scheme, VJ Associates received more than $1.2 million in state and federal taxpayer money.

However, while the scheme went on for over a decade, a whistleblower under the qui tam provisions of the False Claims Act—which allows private parties to bring suit on behalf of the government and to share in any recovery—filed a lawsuit, which led to criminal and civil charges filed by the federal government.

Upon pleading guilty, VJ Associates has agreed to make restitution to the DOT, New York and Massachusetts, and to pay a criminal fine of $530,000. In addition, all VJ Associates entities have entered into a civil settlement with the United States resolving allegations that they overbilled government contracts. Under the terms of that settlement, the VJ Associates entities have agreed to pay $2.6 million collectively to the United States and certain states and to permanent debarment from receiving federal funds.

The whistleblower is slated to receive 22.5% of the recovery.

“This investigation illustrates our commitment to rooting-out illicit business practices aimed at defrauding the Government on public infrastructure projects for commercial gain,” said Douglas Shoemaker, Regional Special Agent-in-Charge, U.S. Department of Transportation Office of Inspector General (DOT OIG). “We will continue to work with our Federal, State, and local law enforcement and prosecutorial partners to investigate and hold accountable those who perpetrate fraud against the American taxpayer.”

U.S. Attorney Lelling, Regional DOT-OIG SAC Shoemaker and Port Authority of New York and New Jersey Acting Inspector General Farbiarz made the announcement today. Assistant United States Attorneys Brian M. LaMacchia and Evan Gotlob of Lelling’s Office are handling the matter.

   

Tagged categories: Contractors; Department of Transportation (DOT); Fraud; Government; Lawsuits; NA; North America; Program/Project Management; Project Management; Subcontractors

Comment from Tony Rangus, (11/23/2020, 12:22 PM)

I guess it is easier to collect fines than file individual criminal charges for employees. Since they are under a permanent debarment as a group of companies, are specific individuals allowed to work for other companies that receive government funds?


Comment from Michael Halliwell, (11/24/2020, 10:55 AM)

Tony, fines are easy in a case like this, "low hanging fruit" as the burden of proof is far lower. To go after individual charges and get a conviction, you need to prove things like active participation and intent for each individual...not easy to do. Would be nice to hold the individuals responsible, but they can be just a slippery as the folks who rack up a ton of OHSA fines and then form a new company with a clean record to keep doing what they are doing.


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