Florida-based Advanced C4 Solutions, Inc. agreed pay $4.535 million to resolve claims that it violated the federal False Claims Act by knowingly overbilling the government for work performed under an Air Force technology contract at Maryland’s Joint Base Andrews.
Defendants Andrew Bennett and James Shank pleaded guilty to conspiracy to commit wire fraud, according to Department of Justice information.
Feds Say Contractors Charge U.S. For Nonexistent Labor Hours, Ineligible Job Rates
The settlement agreement stems from alleged activities beginning in June 2010, when the U.S. Navy’s Space and Warfare Systems Command (SPAWAR) granted Advanced C4 Solutions a contract titled “DO 27” to perform labor and project management services for an Air Force technology project.
At the time, Advanced C4 Solutions was a certified “small business” under Section 8(a) of the Small Business Act.
Under the terms of the DO 27 contract, Advanced C4 Solutions was to design, build and apply both wide area and local area network systems for U.S. Armed Forces’ use on Maryland’s Joint Base Andrews.
The contract required that Advanced C4 Solutions provide the U.S. government with accurate invoices listing work performed, including any work performed by subcontractors. The company could only use pre-approved subcontractors and had to list the number of labor hours worked and labor costs in each job classification on the invoices.
Advanced C4 Solutions chose to enter into a subcontractor agreement with Superior Communication Solutions, Inc. (SCSI) in June 2010. Advanced C4 Solutions project manager, Andrew Bennett, was in charge of supervising all work carried out under the DO 27 contract and verifying the accuracy of all invoices that subcontractors and Advanced C4 Solutions submitted to SPAWAR.
In this case, prosecutors alleged that Bennett knowingly submitted false invoices to the U.S. government requesting pay for SCSI labor hours not worked. The fraudulent invoices also charged the U.S. government ineligible job classification rates because SCSI workers performing the job tasks lacked the credentials required to bill at those rates. Bennett’s actions allegedly led to SPAWAR paying the invoices without knowing they were false.
Defense Contractors’ Overbilling U.S. Violates False Claims Act
Defense contractors working under U.S. government contracts must adhere to all terms of a contract agreement. When contractors submit claims to the government for payment, and those claims knowingly contain false or fraudulent information, each claim is a false claim under the federal False Claims Act.
The False Claims Act serves to safeguard valuable federal taxpayer dollars from corrupt companies and individuals who attempt to waste or abuse government funds for their own profit. In this case, Andrew Bennett, Advanced C4 Solutions and SCSI allegedly attempted to collect payment for work never performed or performed by ineligible personnel.
Each false or fraudulent invoice Bennett submitted to SPAWAR for payment was in violation of the federal False Claims Act, resulting in civil penalties of up to three times the financial harm caused to the government, plus fines of between $5,500 and $11,000 per false claim.
Under the False Claims Act, individuals working under U.S. government contracts who feel their company is submitting false or fraudulent claims for payment are able to file a whistleblower lawsuit on behalf of the government. To urge those with knowledge of fraud to come forward, the government pays whistleblowers cash awards of between 15% and 30% of the total government recovery. For example, in this case, the whistleblower cash award would equal between $680,250 and $1.36 million.
Advanced C4 Pays $4.5M: Bennet and Shank Plead Guilty to Wire Fraud Scheme
Under the settlement agreement, Advanced C4 Solutions, Inc. agreed to pay the U.S. government $4.535 million to resolve the allegations that it overbilled the government for work performed at Joint Base Andrews. In addition, the courts indicted 52-year-old Andrew Bennet of Tampa, Florida and 68-year-old James T. Shank of Perry, Georgia on federal criminal charges relating to the false claims. Bennet and Shank also pleaded guilty to conspiracy to commit wire fraud.
“Federal authorities will vigorously investigate and prosecute defense contractors that cheat the government,” said United States Attorney for the District of Maryland, Rod J. Rosenstein. “The Justice Department works closely with defense agencies to safeguard taxpayer dollars.