Government contractor pays $5 million to settle False Claims Act allegations

posted on:
March 31, 2016

author:
Lance Gould

Earlier this month, the U.S. Department of Justice (DOJ) announced that Hayner Hoyt Corporation agreed to pay $5 million to resolve False Claims Act (FCA) allegations. The government’s complaint alleged that Hayner Hoyt was exploiting contracting opportunities through a procurement program with the Department of Veterans Affairs (VA). This program was designed to aid service-disabled veteran-owned small businesses. In order for a company to qualify for one of these contracts, the company has to be owned by a service-disabled veteran, who also controls the business, including handling its strategic decisions and management.

The Government contends Hayner Hoyt caused false claims to be made when it asserted to the Government that 229 Constructors LLC met all the requirements to be a service-disabled veteran-owned small business. Investigations revealed that Bennett − a service-disabled veteran who Hayner Hoyt claimed served as president and was in charge of a $14.4 million government-contracts portfolio − was actually not involved in making any important business decisions for the company. In fact, he was responsible for the tool inventory and plowing the snow from Hayner Hoyt’s property.

By making these assertions and continuing the scheme, Hayner Hoyt was denying legitimate service-disabled veteran-owned small businesses the opportunity to acquire VA contracts.

U.S. Attorney Richard S. Hartunian for the Northern District of New York stated, “As today’s settlement demonstrates, this office will vigorously pursue those individuals and entities who game programs designed to help our nation’s veterans succeed in starting small businesses.”

The FCA allows private individuals to file lawsuits on behalf of the government when those individuals have knowledge of a person or company defrauding the government. These lawsuits are filed under the qui tam provision of the FCA, as ordinary citizens become whistleblowers by reporting the fraud. The FCA provides monetary incentives and protection for these whistleblowers, which include 15 to 30 percent of the damages recovered. The whistleblower in this case will receive $875,000 for his part in the case.

Are you aware of fraud being committed against the federal government, or a state government? If so, the False Claims Act 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: Archie Grubb, Larry Golston, Lance Gould or Andrew Brashier.

Source: U.S. Department of Justice

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