Information Technology Company Ordered to pay MARAD $985,380 for Submitting False Claims on Federal Contract
On January 25, 2013 , the U.S. Court of Federal Claims, Washington, D.C., ordered Veridyne, Inc. (Veridyne) to pay $985,380 to the Maritime Administration (MARAD) to resolve a civil suit alleging fraud and false claims.
In 2006, we concluded an investigation that alleged Veridyne submitted a fraudulent cost estimate to MARAD for a contract modification that only served to secure the contract under sole-source requirements of the U.S. Small Business Administration (SBA) 8(a) program. Following our finding that Veridyne fraudulently obtained the modification, MARAD terminated the contract. Veridyne allegedly submitted additional invoices to close out the contract which included $787,687 in false and unsupported costs, but MARAD refused to issue further payments. Veridyne then sued MARAD in the Court of Federal Claims in 2008 and the Department of Justice subsequently countersued. The counterclaim sought forfeiture and damages under the special plea in fraud, antifraud provision of the Contract Disputes Act; and the False Claims Act.