Government Contractor to Pay Over $3 Million in Overbilling Scheme Settlement

Government contractor VJ Associates, a group of companies based in Hicksville, N.Y., has agreed to plead guilty to charges related to fraudulent billing and to pay $3.13 million as part of the settlement to resolve both criminal and civil charges. The U.S. federal government alleges that, from January 2007 through August 2018, VJ Associates Inc. of Suffolk, the largest and original company entity, conspired with other VJ Associates entities and employees to pad bogus time charges on government contracts.

VJ Associates provided subcontracted estimating and scheduling services for construction projects funded with state and federal money. Services included forecasting costs and resources to complete a project, and estimating the time necessary to complete milestones in a project.

Examples of the improper billing include hours employees spent working on unrelated projects, time spent on administrative tasks and time not performing work. As a result of the scheme, the company entities received more than $1.2 million in state and federal taxpayer money. The government contracts were funded by the U.S. Department of Transportation, the State of New York and the Commonwealth of Massachusetts.

According to the U.S. Attorney’s Office of the District of Massachusetts, VJ Associates employees were pressured to discuss improper billing openly as “juicing” and “tagging” hours in order to maximize government project bills so as not to “leave money on the table.”

“One employee summed up his billing practices to his colleague as a ‘shell game’ and explained that, when management ‘gave him a bit of trouble’ about how he billed his time, he fraudulently maximized his hours billed because ‘what the hell,’ management ‘pay[s] me every two weeks,’ and he was ‘not the boss,’” reads a statement from the U.S. Attorney’s Office.

The VJ Associates entities will pay $2.6 million collectively to the U.S. and certain states as part of a civil settlement. The company also has agreed to permanent debarment from receiving federal funds. VJ Associates Inc. of Suffolk will pay a criminal fine of $530,000.

The civil settlement arose from a lawsuit filed by a whistleblower. As a result, the whistleblower will receive 22.5% of the recovery.