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HVAC company settles false payroll certification whistleblower claim

We have discussed a range of issues that may provide support for a whistleblower lawsuit under the False Claims Act. Whistleblowers are generally individuals who gain knowledge of fraud related to a federal contract. It is easy to conceptualize overcharging the federal government for services performed or goods provided as a form of fraud. However, fraudulent practices related to a government contract may involve other forms of deception when submitting a bill. A recent case from the Eastern United States highlights how to comply with the law and the terms of the contract may trigger a whistleblower claim.

In the construction industry, federal law may require a contractor to submit certifications of compliance with industry rules for construction contracts. A company on the East Coast contracted to perform plumbing, heating, air conditioning and ventilation work in the renovation or construction of several federal facilities, according to a recent lawsuit.

The Department of Justice says that the HVAC company provided the government with certifications of payroll records throughout the course of the projects. However, the government says an investigation revealed that the certifications contained false information.

Federal laws require construction contractors to certify that their workers are properly classified for the work they have performed under the federal contract and that workers are paid at least the prevailing wage for the type of work. Based upon the initial False Claims Act lawsuit and additional information obtained in an investigation, the DOJ says that the contractor underpaid its workers. In other words, workers were not being paid at least the prevailing wages and benefits for the classifications of labor submitted in the certifying documentation.

The air condition company settled the lawsuit, without admitting any liability. The whistleblower will receive slightly more than $100,000 for coming forward with information and filing the original "qui tam" lawsuit. The FCA allows individuals to file a lawsuit on behalf of the government to root out fraud in federal contracts.

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