Jason Marcus Published in Federal Bar Association YLD Fall Newsletter

Partner Jason Marcus recently had an article, An Introduction to the Federal False Claims Act, published in the Federal Bar Association’s Young Lawyers Division fall “Perspectives” newsletter. As the name suggests, it is a brief explanation of the statute, how to file a case under seal, how the Government investigation works, and obstacles that plaintiffs’ attorneys must avoid (and that defense attorneys can exploit).

Jason is on the board for the Federal Bar Association’s Qui Tam Section. For more information on the False Claims Act, his article can be found here. More information regarding joining the Federal Bar Association or the Qui Tam Section can be found here.

Defense Contractor SESOLINC Agrees to False Claims Act Settlement of up to $2.4 Million

Bracker & Marcus LLC is pleased to announce that the United States has intervened and settled a False Claims Act case filed by its client, Charles Jackson, against defense contractor SESOLINC Group for up to $2.4 million. SESOLINC is alleged to have knowingly sold defective products to the United States military and Department of Veterans Affairs. In addition to monetary payments, SESOLINC has agreed to repair all previously sold defective products.

When Charles Jackson came to our firm, he had but one concern: the safety of our nation’s soldiers. Mr. Jackson was a combat engineer for the U.S. Army for eight years, and his children also shared the honor of serving their country. In 2011, he became a salesman for SESOLINC, which builds pre-fabricated small buildings and equipment systems for the military and VA.

On his very first tour of the factory, Mr. Jackson—an electrician with over 30 years of experience—spotted safety issues with the systems that SESOLINC sold, including use of the wrong types of wiring, bushings, boxes, and other parts; improper grounding; lack of wire protection conduits; and lack of proper insulation. These systems were built to be transported from base to base and even flown across oceans to be used in theater of war. If jostling during transport were to shred a wire, simply because it was the wrong type or lacked standard safety protections, the systems could fail, fires could start, and soldiers could be electrocuted. He immediately raised his concerns with management about the defective and unsafe products and was told they’d be dealt with, but they never were.

For the next few years, whenever Mr. Jackson sold a system to his military customers, he personally checked it after delivery and made any necessary repairs. But in fall of 2014, customers at other bases started to complain that their systems were failing and constituted a safety hazard. After months of accusing the customers of “user-error”, SESOLINC issued a callback on a small subset of the systems, hiding from the military that all of the other systems contained similar issues and threatening to fire anyone who even mentioned another system. Mr. Jackson, not one to be silenced, complained to his supervisors that SESOLINC needed to recall all of the systems, until he was fired. He subsequently retained Bracker & Marcus LLC to file a qui tam and claim of retaliation under the False Claims Act.

After more than three-and-a-half years, the Government has intervened and settled the claims against SESOLINC. The company has agreed to pay up to $2.4 million to settle Mr. Jackson’s allegations. And more importantly, it is engaging in a recall of its products to ensure that any defective or substandard systems that had previously been delivered to military units are repaired and in full working order. Mr. Jackson will receive a share of the recovery, but more importantly, he once again feels the pride of having served his country and having kept its soldiers safe.

We congratulate our client, Mr. Charles Jackson, as well as the team representing the United States of America on achieving this tremendous result: Assistant United States Attorneys Shannon Heath Statkus and J. Thomas Clarkson; Special Agent Lam Hoang with Defense Criminal Investigative Service; Special Agent James Parkinson with Army Criminal Investigative Division; Special Agent Priva Guillory with U.S. Department of Veterans Affairs Office of Inspector General; and Special Agent Steven Heckler with General Services Administration Inspector General.

The case is captioned United States ex rel. Jackson v. Sesolinc Group, Inc., Case No. 4:16-cv-00092-WTM-BKE (S.D. Ga.). The United States’ press release can be seen here.

Back to School Fraud?

It has been quite a summer, here at Bracker & Marcus LLC. We kicked things off with a nice False Claims Act settlement against a Compound Pharmacy, alleged to have defrauded Medicare and Medicaid by using bulk ingredients but billing for name-brand. We then attended the national conference for the National Employment Lawyers Association in N’awlins, where this Tulane grad got his fair share of etouffee, po’boys, and beignets. And now if you can believe it, it’s already time to go back to school. At least it is here in Marietta, GA, where the county operates on a quarter system. Which brings us to another area rife with fraud: for-profit education.

Many attendees of for-profit colleges obtain money from the federal government to help pay for their schooling, such as Pell or VA grants or loans. In order for schools to qualify to accept these grants, they must abide by certain rules. For example, colleges are not permitted to pay recruiters based on how many students they enroll; this is called the “incentive compensation ban.” The 90/10 rule requires for-profit schools to obtain at least 10% of their revenue from private payors or financial aid sources besides the federal government. And the schools may only admit students who actually qualify, meaning having high school diplomas or speaking the language the classes are taught in, but some schools have been caught helping unqualified students falsify Pell grant applications. Any of these violations could form the basis of a False Claims Act case.

In addition to the for-profit colleges, there are other privately-run, but publicly-funded, schools that may fall under the umbrella of the False Claims Act as well. One example is schools that are educating boys and girls in juvenile correction facilities or behavioral health institutions.

And there are also private universities that receive federal grant funds for research projects. If the university does not follow the requirements of the grant or the results are frauded up, it may be liable under the FCA. Just a few months ago, Duke University paid $112.5 million to settle claims that they falsified scientific data in order to obtain additional grants.

So as the summer comes to an end, remember to wear sunscreen, study hard, and look out for potential fraud!