The U.S. Department of Justice announced that masonry companies, Frazier Masonry Corp., F-Y Inc., CTI Concrete & Masonry Inc., Masonry Technology Inc., and Masonry Works Inc,, and individuals, Russell Frazier and Rob Yowell, agreed to pay nearly $1.9 million to settle False Claims Act allegations. The settlement partially resolves two lawsuits filed by the Rabon Law Firm, Berg & Androphy, and the Abbott Law Firm on behalf of the United States and the relator, Rickey Howard.
The lawsuits allege that the Frazier defendants conspired with prime contractors that had been awarded large construction contracts for projects at Marine Corp bases, Camp Lejeune and Camp Pendleton, to violate the False Claims Act by falsely certifying that qualified disadvantaged small businesses had performed the subcontracted masonry work. Pursuant to the Federal Acquisition Regulations (FARs), prime contractors who have been awarded large construction contracts must submit a subcontracting plan, wherein they agree to subcontract a portion of the work on the project to various types of small businesses.
The cases allege that the small business status of F-Y, CTI, Masonry Technology, and Masonry Works, was misrepresented in order to pass-through masonry subcontracts to Frazier Masonry and still (falsely) represent compliance with subcontracting plans. The aforementioned companies could not qualify as legitimate small businesses under the size standards in the pertinent regulations because the companies were affiliated with Frazier Masonry, a large business.
The $1.9 million dollar settlement was based on an ability to pay and does not reflect the true damages to the government in these cases. Other companies remain as defendants in the cases.
The DOJ press release can be found here.
If you have a Small Business fraud case, please contact the Rabon Law Firm for a free consultation.