A group of five Gardena-based government service contractors agreed Wednesday to pay $5.8 million to settle a federal whistleblower lawsuit alleging the information technology companies duped the government in order to win money specifically set aside for small businesses.
The U.S. Attorney’s Office in Los Angeles said that En Pointe, Inc., En Pointe Technologies Inc., En Pointe Technologies Sales Inc., Dominguez East Holdings LLC, and Din Global Corp. collaborated to portray En Pointe, Inc. as a small business when it was not. As a result, it should have been barred from winning small business contracts awarded to it from 2011 to 2014. The government also alleged the companies underreported sales to the General Services Administration to avoid certain fees.
“Small businesses, in some cases, are eligible to receive a preference when government contracts are issued,” U.S. Attorney in Los Angeles Eileen Decker said. “Large companies that fraudulently solicit and obtain contracts under small business set-aside programs, like the companies in this case, not only abuse the system but also harm legitimate small businesses by taking those contracts away from them.”
The government initially sued the companies in 2014 after Virginia-based Minburn Technology Group and its managing member Anthony Colangelo filed a whistleblower action alleging wrongdoing by the En Pointe group companies. As part of the False Claims Act statute, Minburn Technology and Colengelo are entitled to $1.4 million of the total settlement.
Century City-based Bird Marella Boxer Wolpert Nessim Drooks Lincenberg & Rhow partner Jeremy Matz, who represented defendants in the proceedings, said the government’s characterization of the case was entirely misleading and that his clients admitted no wrongdoing.
“Contrary to the improper and misleading impression that might be created by the government’s (statements), the En Pointe companies did not defraud the government, knowingly misrepresent their eligibility for any government contract, or deliberately fail to pay any amounts owed under any government contract,” Matz’s said in a statement. “The allegations have never been proven or established anywhere, at any time.”
Legal reporter Henry Meier can be reached at [email protected]. Follow him on Twitter @henry_meier.
