Justice News

Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Friday, June 26, 2009
GSA Contractor University Loft Company to Pay U.S. $400,000 to Resolve Contract Fraud Allegations

WASHINGTON – Following an investigation of alleged false claims and contract fraud, J Squared Inc., d/b/a University Loft Company, has reached a settlement with the United States, the Justice Department announced today. Indiana-based University Loft Company has agreed to pay the United States $400,000.

The settlement resolves allegations that the company knowingly sold Malaysian-made furniture to government purchasers in violation of the Trade Agreements Act (TAA). To further government trade policy, the Trade Agreements Act sets requirements for the country of origin of products sold to the United States. University Loft Company was required to comply with the TAA under contracts with the General Services Administration that allowed it to sell to the military and other government purchasers. University Loft Company competitor Furniture by Thurston Inc., and Lee Thurston filed this lawsuit on behalf of the U.S. government and will receive a $66,000 share of the recovery. Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery obtained by the government.

"This settlement shows that companies that do business with the government will be held to the terms of their government contracts," said Tony West, Assistant Attorney General for the Department of Justice’s Civil Division.

This settlement was the result of a coordinated effort to investigate and resolve the allegations by the U.S. Department of Justice, Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the District of Columbia; the General Services Administration, Office of Inspector General; the Air Force Office of Special Investigations; the Defense Criminal Investigative Service; the Naval Criminal Investigative Service; and the Department of the Navy, Acquisition Integrity Office.

This case was investigated as part of the National Procurement Fraud Initiative. In October 2006, the Deputy Attorney General announced the formation of a National Procurement Fraud Task Force designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force is chaired by the Assistant Attorney General for the Criminal Division and includes the Civil Division, the U.S. Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as others brought by members of the task force, demonstrates the Justice Department’s commitment to helping ensure the integrity of the government procurement process.

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