Edward M. Yarbrough
United States Attorney
Ellen Bowden McIntyre
Assistant U.S. Attorney
(615) 736-2125
U.S. SUES TWO CONTRACTORS AT FORT CAMPBELL FOR FALSE CLAIMS
Nashville, TN - October 20, 2008 - Edward M. Yarbrough, U.S. Attorney for the Middle District of Tennessee, announced that the United States filed an amended lawsuit today against two companies alleging that they submitted, or caused to be submitted, false statements to the United States Government in order to receive reimbursement for work performed on a government contract at Fort Campbell that did not meet government requirements. The companies are Circle C Construction, LLC and Phase Tech, LLC.
The government alleges in its amended complaint that Circle C had a contract to perform building work at Fort Campbell and that it used Phase Tech as a subcontractor to perform the electrical work on the contract. The amended complaint further claims that Circle C filed false payroll certifications with the government that failed to disclose Phase Tech as a subcontractor, failed to identify any of its employees as required by federal law and the contract’s terms, and falsely certified that Circle C and its agents were paying the prevailing wages to employees that were required by the contract. According to the amended complaint, Circle C engaged in these violations in order to be reimbursed for work performed on a government contract that did not meet government requirements. By submitting these false statements to the government in the false payroll certifications, the amended complaint says, Circle C caused the government to reimburse Circle C for the full contract price, which the United States would not have paid if it had known that Circle C and Phase Tech were not complying with their legal obligations.
The case was originally filed by a private citizen under the qui tam provisions of the False Claims Act. Under the Act, a private individual can sue on behalf of the government and can potentially share in any recovery. In the amended complaint, the government also adds civil common law claims for unjust enrichment and payment by mistake.
Persons or companies that violate the False Claims Act can be liable for treble damages that they cause to the United States and civil penalties of between $5500 and $11,000 per violation.
Today’s complaint is an example of the Department of Justice’s commitment to protect U.S. taxpayers from public procurement fraud through the National Procurement Fraud Task Force. The National Procurement Fraud Initiative announced in October 2006, is designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in contracting activity for national security and other government programs.