Utah Construction Contractors Reach Civil Settlement In False Claims Act Case

SALT LAKE CITY – Big-D Construction Corp. and Creative Times Day School, Inc., have agreed to pay the federal government a combined amount of $1,062,900 and $150,000 respectively to resolve allegations that they violated the terms of a Small Business Administration (SBA) program for small and disadvantaged businesses.  Big-D Construction Corp. and Creative Times Day School, Inc. are Utah corporations that have performed construction projects for federal agencies under the terms of various government contracts.

U.S. Attorney for Utah John W. Huber and SBA Acting Inspector General Hannibal “Mike” Ware announced the settlement Monday afternoon. The settlement with Big D was the result of a coordinated effort among the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the District of Utah, the SBA Office of Inspector General, the SBA Office of General Counsel and the U.S. Army Criminal Investigation Commands Major Procurement Fraud Unit.

The United States contends that Big-D, a large construction company, entered into a leasing agreement with Creative Times, a small business participant in the SBA programs, under which Big-D provided personnel who performed or substantially performed the work on the contracts. The United States contends that the leasing agreement was improper and caused Creative Times to fail to meet the SBA’s regulatory requirement that the small businesses perform a certain percentage of the work under the contracts, thereby causing the small businesses to submit false or fraudulent claims for payments to the United States.  The settlements involve a number of different government contracts in Kansas, Colorado, New Mexico, and Utah between July 2009 and June 2013.

“These programs exist to help small business, often minority owned, to receive federal contracts.  Those who apply for them must be honest and forthright in their dealings with the United States,” U.S. Attorney John W. Huber said today.  “In our experience, these cases are on the rise in Utah.  We will continue to partner with the Department of Justice and our agency partners to investigate these cases,” Huber said.

“Concealing the true nature of a purported small business contract participation will be met with significant penalties,” said SBA Acting Inspector General Hannibal “Mike” Ware.  “SBA OIG will continue to aggressively pursue parties that undermine Americans’ confidence in federal contracting programs designed to assist small businesses.  I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication in enforcing compliance in SBA’s programs.”

The qui tam complaint was filed in the District of Utah and is captioned United States ex rel, Bart Anderson v. Big D Construction Corp. et al., No. 1:11-cv-00176.  The settlement resolved allegations of non-compliance. Neither Big-D nor Creative Times Day School, Inc. admit liability.