Maryland-based MassTech, Inc., its former Chief Executive Officer, Arnold Lee, and its former Chief Financial Officer, Richard Lee, have agreed to pay the United States $1.9 million to resolve allegations that MassTech falsely certified it was a small business concern in order to obtain Small Business Innovation Research (SBIR) awards.
The settlement agreement was announced on May 3, 2018.
The SBIR program is a set-aside program for small businesses. The purpose of the SBIR program is to strengthen the role of small business concerns in federally funded research and development and to increase private sector commercialization. To receive SBIR funds, each awardee of an SBIR Phase I or II award must qualify as a small business at the time of the award as well as throughout the duration of the award. To be eligible, the small business and its affiliates collectively must have fewer than 500 employees. According to the settlement agreement, the government alleged that MassTech, Arnold Lee, and Richard Lee falsely represented to the National Science Foundation (NSF), to NASA, and to the Dept. of Health & Human Services (HHS) that MassTech was an eligible small business concern at the time of the SBIR application as well as throughout the lifecycle of the award. As a result, NSF, NASA, and HHS approved and funded SBIR awards to MassTech that MassTech otherwise would not have received. MassTech, Arnold Lee, and Richard Lee denied the United States’ allegations.
NSF’s Office of Inspector General, the NASA Office of Inspector General, and the HHS Office of Inspector General worked in the investigation. The settlement agreement was announced by the U.S. Attorney for the District of Maryland.
