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ARTICLE ID 195499

$________ – DOJ – SBA – COMPANY ACCUSED OF MISREPRESENTING ITSELF TO SMALL BUSINESS ADMINISTRATION – ALLEGED VIOLATION OF FALSE CLAIMS ACT

U.S. District Court, Middle, Florida

In this action, the United States accused a Florida company of misrepresenting itself to the Small Business Administration (SBA). The matter was resolved via settlement.

In ________, the defendant, Air Ideal Inc., of Orlando, Florida and its majority owner, Kim A., applied to the SBA for certification as a Historically Underutilized Business Zone (HUBZone) company. As part of their application, the defendant claimed that the principal office was located in a designated HUBZone. However, in a later complaint, the plaintiffs asserted that this location was a "virtual office" where none of defendant’s employees actually worked, and that they were, in fact, located in a non-HUBZone location. The defendant was also accused of misrepresenting to the SBA the location of their principal office, as well as fabricating lease agreements and other documents. The defendant used its alleged fraudulently-procured HUBZone certification to obtain contracts from the U.S. Coast Guard, U.S. Army, U.S. Army Corps of Engineers, and the U.S. Department of the Interior that were set aside for qualified HUBZone companies. Finally, the plaintiffs alleged that that during the government’s investigation of this case, the defendants fabricated another version of its agreement for the virtual office and submitted that false document to the government.

The whistleblower, Patricia H., who is employed in the construction industry, filed suit under the qui tam provision of the False Claim Act in the U.S. District Court for the Middle District of Florida. The United States later intervened the suit – asserting claims against defendants under the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of ________.The matter was resolved via settlement for $________ in damages, with $________ of that amount to go to the whistleblower. Under the settlement, the defendants must also pay 5% of their gross revenues over the next five years.

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