Baron & Budd Represents Whistleblower in DOJ’s $2.8 Million Settlement With Hensel Phelps Involving Small Business Subcontracting Fraud

Baron & Budd’s client provided the critical inside information to the DOJ that resulted in this small business fraud settlement

Today, the national law firm of Baron & Budd announced that it helped the Department of Justice secure a $2.8 million settlement against Hensel Phelps Construction Company in a False Claims Act case involving allegations of small business subcontracting fraud. In what is believed to be historic timing, the DOJ intervened and settled the qui tam matter a mere 21 days after the complaint was filed.

The settlement is related to the recent False Claims Act settlement against TriMark USA, LLC (“TriMark”). In that case, Baron & Budd attorneys helped obtain the largest amount ever recovered in the history of False Claims Act litigation involving allegations of small business fraud.

The lawsuit against Hensel Phelps was brought by a whistleblower represented by Baron & Budd who alleged that Hensel Phelps falsely certified to the government that it had subcontracted portions of a $68 million construction project involving the Armed Forces Retirement Home (“AFRH”)—a retirement community in Washington, D.C. that houses veterans and active-duty members of the United States Armed Forces—to a service-disabled veteran-owned small business (“SDVOSB”). Based on the whistleblower’s inside information, the government learned that Hensel Phelps instead engaged in a pass-through scheme with TriMark to make it appear as if Hensel Phelps awarded the subcontract to an SDVOSB on the AFRH project. In reality, however, TriMark provided the underlying services and the SDVOSB neither substantively performed on the contract nor otherwise added value to the transaction aside from its set-aside status.

The pass-through scheme allowed Hensel Phelps to falsely gain monetary bonuses from the government. Hensel Phelps knew the subcontracts were actually performed by a large business, enabling the company to obtain higher revenues and profits.

“Our whistleblower client came forward with critical, inside information revealing that Hensel Phelps attempted to deceive the government into believing that a service-disabled veteran-owned small business was performing valuable work as a government subcontractor. We are encouraged that the Department of Justice and contracting agencies are closely scrutinizing large businesses’ subcontracting plans to ensure that legitimate small businesses have the opportunity to fairly compete for these valuable contracting opportunities,” said Andrew Miller, a shareholder in the qui tam group at Baron & Budd.

This case is another example of the importance and the strength of the public/private partnership between whistleblowers and the DOJ. The attorneys at Baron & Budd are committed to representing whistleblower clients and helping the DOJ to protect contracting opportunities for legitimate small businesses and hold accountable those who engage in fraud.

About Baron & Budd, P.C.

Baron & Budd, P.C. is among the largest and most accomplished plaintiffs’ law firms in the country. With more than 45 years of experience, Baron & Budd has the expertise and resources to handle complex litigation throughout the United States. As a law firm that takes pride in remaining at the forefront of litigation, Baron & Budd has spearheaded many significant cases for hundreds of entities and thousands of individuals. Since the firm was founded in 1977, Baron & Budd has achieved substantial national acclaim for its work on cutting-edge litigation, trying hundreds of cases to verdict and settling tens of thousands of cases in areas of litigation as diverse and significant as dangerous and highly addictive pharmaceuticals, defective medical devices, asbestos and mesothelioma, California wildfires and environmental contamination, fraudulent banking practices, e-cigarettes, motor vehicles, federal and state whistleblower cases, and other consumer fraud issues.

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