Tuesday, September 11, 2018

Companies Get Paid Multiple Times for the Same Work

Three corporations - Laserlith Corporation, Black Hills Nanosystems Corporation, and Blue Sky Engineering, Incorporated - were owned and controlled by one individual, Wallace Tang. Mr. Tang just pleaded guilty to defrauding NASA (National Aeronautics and Space Administration), NSF (National Science Foundation), and the Energy Department through their SBIR (Small Business Innovative Research) programs and has paid about $1.1 million in restitution back to the Government.

The SBIR program are designed to promote the progress of science by increasing opportunities for small businesses to undertake cutting-edge scientific research. Mr. Tank and his corporations unlawfully and knowingly conspired and agreed together to devise a scheme to defraud and obtain money and property from NASA, NSF, and DoE through false and fraudulent representations. The purpose of this conspiracy was to obtain federally-funded projects by and through material misrepresentations, statements, and omissions, thereby depriving the Agencies the ability to fund other legitimate research.

According to the affidavit, the corporations applied for and received federal awards for essentially equivalent work, or portions thereof, concealing the existence of the awards and the relationships between related companies from the awarding agencies. During the application process, the corporate-defendants misrepresented the existence and use of distinct company facilities, equipment, and operations in South Dakota and North Dakota, and elsewhere outside of California. These representations and statements were false in that of of the companies were co-located in a common facility in Richmond, California, sharing the same resources and performing essentially equivalent work, or portions thereof.

The fraudulent conduct included the preparation and submission of proposals for awards under NSF, NASA, and DoE SBIR programs, specifically involving costs, employees, the eligibility of principal investigators, suitability of facilities, location of facilities, subcontractors, consultants, letters of support, and certifications submitted to those Agencies.

Sentencing is scheduled for later this year. You can read more about this case in the Justice Department press release.

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