The U.S. Attorney office has announced that two New York construction companies and others have agreed to pay more than $4.47 million to resolve fraud allegations involving the securing of contracting work meant for disabled veterans.
According to New York Upstate, Northland Associates Inc., Liverpool, New York; its president James Tyler, the Diverse Construction Group LLC, Cheshire, Connecticut; and their bonding agent, Rose & Kiernan Inc., East Greenbush, New York, said in a press release that they have agreed to pay the U.S. the amount “to resolve allegations they fraudulently exploited contracting opportunities reserved for veteran-owned small businesses and small businesses operating in historically underutilized business zones.”
As part of the settlement agreements, Northland will pay $2,125,000, Tyler will pay $2,125,000 and Diverse will pay $100,000. Rose & Kiernan has already paid $120,000.
“We are committed to curtailing corruption by contractors who take opportunities set aside for small businesses owned and operated by injured veterans,” says U.S. Attorney Grant Jaquith. “We owe no less to those who sacrificed their own well-being for our safety and security.”
The federal government has a long-standing practice of using government contracts to promote small businesses owned by veterans with service-related disabilities and small businesses operating in economically depressed areas. To qualify, a business must report its total income and employees along with the income and employees of any affiliates.
Federal regulations provide that companies are affiliated when one business has the power to control another, or when a third party has the power to control both businesses. When two companies are affiliated, and together exceed the income and employee limitations, neither will be eligible for small business set-aside contracts.
The settlement with Northland, Diverse, and Tyler resolves allegations that those parties orchestrated a scheme to secure government set-aside contracts for Diverse and subcontracts for Diverse’s undisclosed affiliate, Northland.