Western Massachusetts Office Supply Company to Pay $450,000 to Resolve Allegations it Knowingly Caused False Claims to Federal Agencies

ALBANY, NEW YORK – Great Barrington, Massachusetts-based G.A. Blanco & Sons, Inc. (G.A. Blanco), has agreed to pay the United States $450,000 to resolve allegations that it caused a now defunct company, Essential Business Products, Inc. (Essential), to submit false claims for payment to the government in connection with small businesses set-aside contracts.  The announcement was made by United States Attorney Grant C. Jaquith, Department of Energy Inspector General Teri L. Donaldson, and Special Agent in Charge Leo Lamont of Naval Criminal Investigative Service, Northeast Field Office.

“We are committed to curbing fraud by those who contract with the federal government,” said United State Attorney Jaquith.  “Congress set aside contracting opportunities for small, disadvantaged businesses to help them grow.  We will continue to use the False Claims Act to hold unqualified companies accountable when they fraudulently take those opportunities from deserving businesses.”

G.A. Blanco was previously certified by the U.S. Small Business Administration (SBA) as a “small disadvantaged business,” meaning a small business owned and controlled by a socially and economically disadvantaged individual.  In May 2006, GAB graduated from that program for exceeding the income threshold, and became ineligible to obtain small business set-aside contracts.  The following year, G.A. Blanco approached one of its employees and suggested that he start a minority-owned small business to bid on set-aside contracts and that the employee use G.A. Blanco as a supplier.  He agreed.  G.A. Blanco helped its employee prepare the necessary paperwork to form Essential and obtain SBA certification.  In 2007, in connection with the SBA certification process, G.A. Blanco prepared a letter that falsely represented that its employee had resigned when, in reality, he continued to perform work for G.A. Blanco from 2007 through 2018.  G.A. Blanco also helped run Essential by setting the prices for Essential’s products, preparing its bids for government contracts, and maintaining signature authority for its bank account.  While, on paper, the two companies had separate offices; in reality, they worked out of shared office space.  Essential dissolved in September 2019.

DOE-OIG Inspector General Donaldson stated: “The Department of Energy’s Office of Inspector General remains committed to ensuring the integrity of the Department’s programs.  By diverting contracts and benefits intended for legitimate small disadvantaged businesses to an ineligible company, G.A. Blanco undercut the purpose of the Small Disadvantaged Business program.  We will continue to aggressively investigate these matters to protect the Department and the American taxpayers.  We appreciate the efforts of the U.S. Attorney’s Office and our other law enforcement partners.”

NCIS Special Agent in Charge Lamont said: “Fraud is not a victimless crime, and puts our armed forces at greater risk.  The American taxpayers are also victims as the flagrant and wrongful misuse of American taxpayer dollars not only erodes the public trust but also jeopardizes the Department of Navy’s efforts to obtain the best technology, services, and equipment for our brave men and women in uniform.  By conspiring to manipulate the contracting process through lies and deceit, those involved have drained significant resources from the Navy and have made it harder for legitimate companies that play by the rules.”

The investigation and settlement were the result of a coordinated effort among the U.S. Attorney’s Office for the Northern District of New York, DOE-OIG, and NCIS.  The Defense Criminal Investigative Service also assisted with the investigation.  The United States was represented by Assistant U.S. Attorney Adam J. Katz.