SYRACUSE, N.Y. (Legal Newsline) – The Justice Department announced that Syracuse-based Hayner Hoyt Corp. agreed to pay $5 million to resolve allegations its leadership engaged in conduct that exploited contracting opportunities designed for service-disabled veterans.
The United States supports contracts for small businesses owned by service-disabled veterans. Congress developed a target procurement program that requires the U.S. Department of Veterans Affairs set annual contracting goals for these types of businesses.
According to allegations, the defendants created a scheme to manipulate this system. They created an entity called 229 Constructors LLC and put a disabled veteran in place as a figurehead, according to the charges. In reality, the justice department believes the company was run by the same leadership as Hayner Hoyt Corp.
“Those who do business with the federal government must do so honestly,” U.S. Attorney Richard S. Hartunian for the Northern District of New York said. “As today’s settlement demonstrates, this office will vigorously pursue those individuals and entities who game programs designed to help our nation’s veterans succeed in starting small businesses.”
The original lawsuit was filed under the whistle-blower provisions of the False Claims Act. This provision allows private persons to file civil actions on behalf of the United States. In return for their help, the whistle-blower receives a share in recovery funds.
“Federal contracting programs designed to help service-disabled veteran-owned small businesses should never be undermined by actions such as the ones taken by Hayner Hoyt Corp. officials to divert contracts to ineligible large firms,” Inspector General Peggy E. Gustafson for the Small Business Administration said.