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Novum Structures LLC, a Wisconsin-based manufacturer of glass space frames, used in atriums and roofs, has agreed to pay $3 million dollars to settle criminal and civil allegations against the company as a result of a whistleblower lawsuit.
The whistleblower lawsuit claimed that the company falsified documents to conceal the nonpermitted use of foreign materials on federally-funded construction projects, in violation of the False Claims Act (FCA).
Novum Structures pled guilty to concealing a material fact and will be paying $500,000 in criminal fines. In federally-funded construction projects, American-made materials are preferred, and Novum hid its noncompliance and chose foreign made components instead, according to the whistleblower lawsuit.
“When taxpayer dollars are provided for construction projects, the government expects contractors to comply with all requirements, including ones that ensure the money remains in the U.S. economy,” explained Principal Deputy Assistant Attorney General Benjamin C. Mizer. “This settlement shows that the Department of Justice is committed to pursuing claims against contractors that put financial gain ahead of complying with the law.”
The other $25 million that was included in the settlement was to resolve allegations that the company violated the False Claims Act by choosing to skirt contractual obligations by choosing to use “noncompliant foreign materials” on federally funded projects between January 2004 and July 2013.
The qui tam lawsuit was filed by Breda K. in August 2012, a former employee of Novum who worked with the company from June 2004 through March 2012, according to the claim. The government decided to join the lawsuit and intervened on New Year’s Eve 2015, and the case was unsealed Monday, Jan. 4, according to court documents.
For her role as a whistleblower in helping expose the fraud against the government, Breda is expected to receive about $400,000 from the civil settlement money.
Breda alleged that Novum used materials from Italy in China while completing a project in a ground transportation hub adjacent to Miami National Airport. The project was commissioned by the Florida Department of Transportation and was partly funded by the federal government. Novum earned $1.46 million for that contract and got further work for $13.5 million.
In another project, Breda alleged that Novum used products from China and Germany in a $515,000 contract as part of a New Orleans streetcar expansion project commissioned by the New Orleans Regional Transit Authority and partially federally funded. Breda also alleged that Novum used materials from China and Germany in a contract at a federal courthouse in Illinois.
According to the lawsuit, Breda said she was repeatedly told to lie and produce false records in order to hide Novum’s Buy American noncompliance.
The Whistleblower Lawsuit is Case No. 12-cv-00860 in the U.S. District Court for the Eastern District of Wisconsin.
In general, whistleblower and qui tam lawsuits are filed individually by each plaintiff and are not class actions.
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