Shipyard Settles False Claims Act Charges With SBA

On October 29, 2014, the United States Department of Justice issued a press release announcing a settlement agreement with North Florida Shipyards and its president, pursuant to which the defendants agreed to pay $1 million to resolve allegations that they violated the False Claims Act by creating a front company to secure Coast Guard vessel repair contracts set aside for Service Disabled Veteran Owned Small Businesses. The action began with a qui tam complaint filed in 2011 by two service-disabled veterans, alleging that the shipyard violated Small Business Administration requirements by using their names to create a pass-through contracting entity, although the actual work, control, profit, and ownership flowed through to North Florida Shipyards and its owners. United States ex rel. Yerger v. Ind-Mar Servs., Inc., No. 3:11-cv-00464-TJC-MCR (M.D. Fla.).