The False Claims Act (“FCA”) remains a powerful enforcement tool for the government. As CG attorneys previously reported, the federal government secured over $2.2 billion in settlements and judgments from FCA cases brought against companies and individuals in 2020 alone. Healthcare fraud has been the leading source of FCA recoveries and accounted for more than $1.8 billion of the $2.2 billion recovered in 2020. Despite the focus on the healthcare industry, partly due to the COVID-19 pandemic and the authorization of billions in relief funds, the U.S. Department of Justice (“DOJ”) continues to use the FCA as an enforcement tool in other industries too, like finance, education, and military contracting.
On February 17, 2021, the DOJ announced that COLAS Djibouti SARL (“Colas”) agreed to pay $3.9 million to resolve civil allegations it violated the FCA. Colas is a French limited liability company that contracted to provide concrete for use on U.S. Navy airfields in the Republic of Djibouti. According to the DOJ, the settlement resolved allegations that Colas “knowingly provided contractually non-compliant concrete,” which did not meet various requirements.
As part of its contracts with the Department of Navy, Colas had to certify that the concrete it supplied met contractual specifications. However, Colas allegedly made fraudulent misrepresentations, including submitting fictitious testing results regarding the concrete’s composition and characteristics. For example, in response to a request for an analysis of the water used in the concrete, Colas responded with an analysis of bottled drinking water. The DOJ also claimed that Colas’ concrete contained excessive alkali-silica reactive material and elevated chloride content, amongst other non-compliant characteristics. The substandard concrete could promote early-age cracking, corrosion of embedded steel, surface defects, and overall hamper the concrete’s durability, according to the DOJ.
In addition to the FCA settlement, Colas also agreed to a separate Deferred Prosecution Agreement (“DPA”) wherein it admitted certain underlying facts and admitted one count of conspiracy to commit wire fraud. Under the DPA, Colas agreed to forfeit $8 million, pay $2.5 million as a penalty, and pay approximately $2 million in restitution to the Department of Navy.
Any entity doing business with the federal government – in any industry – must comply with contractual obligations to avoid running afoul of fraud, waste, and abuse laws like the FCA. The attorneys at Chilivis Grubman represent both companies and individuals in connection with government investigations, both criminal and civil, and in False Claims Act litigation. If you have any questions related to such matters, please contact us today.