Five California-based masonry subcontractors and two people paid the federal government $1.9 million to resolve allegations that they falsely claimed to be small businesses to land military construction contracts, federal officials announced today.
The allegations maintain that defendants – Frazier Masonry Corp., F-Y Inc., CTI Concrete & Masonry Inc., Masonry Technology Inc., Masonry Works Inc., Russell Frazier and Robert Yowell – misrepresented their disadvantaged small business status in connection with military construction contracts.
“This settlement demonstrates our continuing vigilance to ensure that those doing business with the military do so legally and honestly and that taxpayer funds are not misused,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “Among the rules that military contractors and subcontractors must follow are those relating to the use and hiring of small businesses.”
The case involved contracts to construct facilities at Marine Corps bases at Camp Lejeune, N.C., and Camp Pendleton, Calif. Under the rules of the Small Business Administration, the contracts required that a certain percentage of the work be performed by disadvantaged small businesses.
This contract requirement was intended to benefit small firms owned by women, minorities and other disadvantaged groups, according to authorities. Russell Frazier previously pleaded guilty in related criminal proceedings to causing false statements.
The settlement also resolves allegations filed in two lawsuits by Rickey Howard, a former employee of Frazier Masonry Corp., in federal court in Raleigh, N.C., officials said.
The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery, officials said. The act also allows the government to intervene and take over the action, as it did in this case.
Howard will receive $393,383.