The U.S. Department of Justice (DOJ) has announced that a group of California-based companies — En Pointe Gov., Inc., En Pointe Technologies, Inc., En Pointe Technologies Sales, Inc., Dominguez East Holdings, LLC and Din Global Corporation — have resolved allegations of violations of the False Claims Act by agreeing to pay the government $5.8 million.
The government alleged that En Pointe Gov., Inc. falsely certified that it was a small business in order to obtain contracts set aside for small businesses. The government also found that the company under-reported sales under a General Services Administration (GSA) contract in order to avoid the payment of fees.
En Pointe Gov., Inc. is now known as Modern Gov IT, Inc.; En Pointe Technologies Sales, Inc. is now known as Collab9, Inc.; and En Pointe Technologies, Inc. is now known as Dinco, Inc.
“These companies defrauded the government in two ways, each of which cost taxpayers,” said U.S. Attorney Eileen M. Decker for DOJ’s Central District of California. “Small businesses, in some cases, are eligible to receive a preference when government contracts are issued. Large companies that fraudulently solicit and obtain contracts under small business set-aside programs, like the companies in this case, not only abuse the system but also harm legitimate small businesses by taking those contracts away from them.”
In this case, the government alleged that, between 2011 and 2014, the defendants were liable for false representations that En Pointe Gov., Inc. met Small Business Administration (SBA) requirements to obtain work that was only available to small businesses. In particular, the government alleged that En Pointe Gov, Inc.’s affiliation with the other defendants rendered it a non-small business and, thus, ineligible for the small business set-aside contracts it obtained.
The government also alleged that defendants caused En Pointe Gov., Inc. to file false quarterly reports with the GSA between 2008 and 2015, under-reporting sales made under a GSA schedule contract that allowed other federal agencies to purchase from En Pointe. Under the terms of the contract, En Pointe was supposed to return to GSA a percentage of its sales receipts. This is known as an Industrial Funding Fee.
The settlement resolve allegations filed in a lawsuit by Minburn Technology Group, LLC (Minburn), a Virginia company that sells information technology products and services, and Anthony Colangelo, Minburn’s managing member. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action, as it did in this case. Minburn and Mr. Colangelo will receive approximately $1.4 million.
