On Jan. 5, 2016, the Department of Justice announced that Novum Structures LLC (Novum) agreed to pay $3 million to resolve criminal and civil allegations arising from improper use of federal funds. Novum, an architectural firm based in Wisconsin, used foreign materials on building projects funded by the federal government. The use of foreign materials in Novum’s federally funded projects violated contractual provisions, which included various domestic preference statutes.
The domestic preference statutes at issue are referred to as “Buy America” requirements. The goal of “Buy America” provisions is to advance the U.S. economy by ensuring federal money devoted to building or transit projects is being used to promote American businesses. These provisions can be quite broad, coming into effect if federal monies are received to fund any portion of the project.
In the Novum matter, the architectural firm entered into contracts that involved both government buildings and transit projects, which were partly paid for with federal funds. Therefore, Novum submitted false claims by knowingly using foreign materials for those projects. Moreover, it was alleged that Novum falsified documents relating to some of the federally funded projects so as to hide the use of foreign materials.
These allegations were brought by Brenda King, a whistleblower, under the qui tam provisions of the False Claims Act. The False Claims act permits private individuals to sue on behalf of the government when the government itself is being defrauded. The False Claims Act also provides incentives for private individuals to do the right thing and report the fraud. These incentives include rewarding the whistleblower with an amount ranging from 15 to 30 percent of the funds recovered by the government.
In this case, King will receive $400,000 for her role in bringing Novum’s fraud to the Government’s attention.
Are you aware of fraud being committed against the federal government, or a state government? If so, the FCA can protect and reward you for doing the right thing by reporting the fraud. If you have any questions about whether you qualify as a whistleblower, please contact an attorney at Beasley Allen for a free and confidential evaluation of your claim. There is a contact form on this website, or you may email one of the lawyers on our whistleblower litigation team: Andrew Brashier, Archie Grubb, Larry Golston, or Lance Gould.
U.S. Department of Justice
Third Party Contacting Guidance, 2008 WL 4534439