Government Contractor to Pay More Than $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. As a result of the scheme, the company entities received more than $1.2 million in state and federal taxpayer money.

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.”

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.

Judge Dismisses Insurance Provider’s Attempt to Cap Coverage in Tornado Suit

Pilkington North America will be allowed to continue seeking up to $85 million in coverage from Mitsui Sumitomo Insurance Company of America (MSI) in addition to the $15 million it’s already received following a tornado that damaged its Ottawa, Ill., plant in February 2017.

U.S. District Judge John Keenan has granted a motion by Pilkington North America to dismiss MSI’s counterclaims in which it sought to cap its coverage duty at $15 million and to prevent Pilkington from seeking further recovery.

Pilkington North America experienced a $60 to $100 million loss after a tornado struck its glass manufacturing facility in Ottawa. It is seeking compensation through a commercial property and business interruption insurance policy issued by MSI to Pilkington’s parent company, NSG Group. Pilkington alleges that MSI revised the insurance policy fraudulently so that the loss caused by the tornado would not be fully compensable. It has also alleged that its insurance broker at the time, Aon Risk Services Central, provided faulty advice while brokering the policy, which allowed MSI’s fraud to succeed.

The change to the local policy occurred in an effort to mirror it with NSG Group’s master policy, which puts a $15 million sublimit on windstorm damage.

Judge Keenan dismissed MSI’s request to issue an order declaring that coverage for losses arising from a windstorm in the U.S. is subject to a $15 million sublimit and estopping Pilkington from seeking to recover any additional amounts.

Pilkington North America told USGlass magazine it does not comment on litigation matters.

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