A New York-based estimation consulting firm has agreed to pay the government a total of $3.13 million in criminal and civil fees to settle allegations that they violated the False Claims Act. VJ Associates were working for the governments of Massachusetts, New Jersey, and New York on several projects, including renovations to Taunton State Hospital in MA and the Port Authority bus stations in NY and NJ. Estimating consultants are generally contracted by states to predict and keep track of the costs of certain large projects and recommend contractors and affordable construction solutions based on the finances of the project.
The settlement is a result of a whistleblower complaint. Under the qui tam provisions of the False Claims Act, whistleblowers can sue on behalf of the government and receive a reward of 10 to 30% of the total money recovered. The government has estimated that VJ Associates illegally took $1.2 Million from state governments through overbilling. The False Claims Act allows the government to recoup triple the damages that they were defrauded for, resulting in a hefty settlement. The unnamed whistleblower could also receive a large reward for their important work in bringing this overbilling scheme to light.
On October 29 the U.S. Attorney’s office in Boston released a statement saying that VJ Associates had agreed to pay the settlement and that the company would be disbarred from contracting with government agencies. The government alleges that management at VJ Associates encouraged a pattern of overbilling that they called “juicing” to get the most money out of their state contracts. This settlement once again shows how useful the False Claims Act is at stopping fraud on a state and federal level. This overbilling scheme was directly misappropriating and defrauding taxpayer dollars from essential public works projects.