The Department of Justice (DOJ) recently announced a $21.3 million False Claims Act (FCA) settlement involving allegations that a government contractor and two executives improperly obtained federal contracts reserved for service-disabled veteran-owned small businesses (SDVOSBs) and other eligible small businesses.
According to the DOJ, Broadway Electric Inc., its subsidiary Cornerstone Contracting Inc., CEO John Oehler, and President Christian Blake agreed to resolve allegations that they participated in a multi-year scheme to obtain “set-aside contracts” for which Broadway and Cornerstone were not eligible. The contracts at issue were intended to benefit small businesses, including businesses owned and controlled by service-disabled veterans.
Specifically, government alleged that, from approximately April 2017 through May 2025, Broadway and Cornerstone used purported SDVOSBs and other small businesses as pass-through entities to obtain federal contracts. Neither Oehler nor Blake was a service-disabled veteran, and the DOJ alleged that Broadway and Cornerstone were not eligible to obtain the contracts directly.
According to DOJ, Broadway and Cornerstone identified contracting opportunities, prepared and priced bids submitted in the names of small businesses, selected subcontractors and personnel, secured bonding, controlled project execution, handled payroll, and managed financial administration. The DOJ also alleged that the small-business participants received fixed payments, typically about one to three percent of the total contract value, while the remaining revenue flowed to Broadway, Cornerstone, and contractors they selected. The settlement also involved allegations that Broadway and Cornerstone personnel used small-business email domains and signature authority in communications with federal agencies.
Under the settlement, Broadway agreed to pay $17,075,000 plus interest. Oehler agreed to pay $4 million, including $2 million in restitution. Blake agreed to pay $225,000, including $125,000 in restitution. The case was filed by two whistleblowers under the FCA’s qui tam provisions, who will receive a combined total of $3,674,250 as part of the settlement.
GWB represents businesses and individuals in connection with government investigations, False Claims Act litigation, and federal enforcement matters. If you need assistance with such a matter, contact us today.
Get in Touch With Us
For more information or to arrange a consultation, please contact us by telephone at (404) 233-4171 or online by submitting the form below. The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship nor create an expectancy of a potential attorney-client relationship. Do not submit information which is confidential or time sensitive, as it may not be treated as such.