On May 12, the U.S. Department of Justice announced a $2,804,110 settlement with Hensel Phelps Construction Company to resolve allegations that it violated the False Claims Act (FCA) by circumventing federal regulations designed to encourage contract awards to service-disabled veteran owned small businesses (SDVOSBs). According to the settlement, Hensel Phelps, a general contractor that performs public and private construction projects, improperly claimed credit toward its small business subcontracting goals for subcontracts it awarded to an SDVOSB that it should have known was acting as a mere “pass-through” for a large business that was actually performing the work.
The settlement highlights DOJ’s continued focus on FCA enforcement actions involving allegations of small business contracting fraud. DOJ has entered into a number of settlements with large businesses resolving such allegations, including a recent $48.5 million with TriMark USA, LLC, which DOJ described as “the largest-ever False Claims Act recovery based on allegations of small business contracting fraud.” DOJ’s interest in these types of cases stems from its theory that, under the “presumption of loss rule,” 15 U.S.C. § 632(w), the government’s “damages” arising from misrepresentations of small business size or status are equal to the entire value of the contracts awarded. Combined with the FCA’s treble damages provision, the presumption of loss rule makes small business contracting fraud an attractive...
“When companies use kickbacks to influence prescribing, they erode trust in healthcare providers,” said special agent Helsing. Takeda Pharmaceuticals, U.S.A. Inc has agreed to $13,670,921 amid alle...