by Ben Vernia | June 4th, 2020
On June 2, the Department of Justice announced that Oklahoma-based Ross Group Construction Corp., and its affiliated companies, had agreed to pay in excess of $2.8 million to settle a whistleblower’s allegations that that the company defrauded the government by using affiliated entities to obtain contracts set aside for bona fide Small Disadvantaged Businesses. According to DOJ’s press release:
Tulsa, Oklahoma-based contractor the Ross Group Construction Corporation (Ross Group), and its corporate affiliates, have agreed to pay over $2.8 million to settle allegations that they violated the False Claims Act by improperly obtaining federal set-aside contracts reserved for disadvantaged small businesses, the Justice Department announced today.
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To qualify as a small business for purposes of U.S. Small Business Administration (SBA) programs, companies must meet defined eligibility criteria, including requirements concerning size, ownership, and operational control. The settlement with Ross Group resolves allegations that the company fraudulently induced the government to award certain small business set-aside contracts to several affiliated entities that did not meet eligibility requirements. The United States alleged that Ross Group created two companies, PentaCon LLC and C3 LLC, to obtain small business set-aside contracts for which Ross Group itself was ineligible. The United States further alleged that Ross Group maintained operational control over the day-to-day and long-term management decisions of the two purported small businesses, including controlling their financial affairs and business operations, and that, as a result, neither PentaCon nor C3 satisfied the size and eligibility requirements to participate in the set-aside programs. Ross Group, PentaCon, and C3 allegedly concealed their affiliation from the United States and knowingly misrepresented the eligibility of PentaCon and C3 for the set-aside contracts.
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The whistleblower in the case, another company, will receive approximately $520,000, the government announced (a relator’s share of approximately 18.6%).
