HOUGHTON, MI-- A Houghton defense contractor has been ordered to pay $1 million to resolve allegations it submitted false claims for lease costs under its federal defense contracts.
The U.S. Attorney’s Office for the Western District of Michigan says GS Engineering’s president and former bookkeeper are part of the settlement. They and four companies the individuals owned and controlled have also agreed to be voluntarily excluded from federal contracts and awards for a period of three years.
The situation involves allegations that between August 2009 and December 2015, GSE double-billed defense agencies. The company is accused of fully depreciating data acquisition equipment—and charging the depreciation to government contracts—before purporting to transfer and lease the same equipment back to related company Echo Leasing.
The government also says between January 2009 and November 2016, companies under GSE’s common control (Arcadian Holdings, Echo Leasing, GS Infrastructure, and LJ Leasing) leased real property and equipment to GSE at rates that exceeded allowable amounts under the Federal Acquisition Regulation.
GSE must now maintain an ethics and compliance program and retain a Corporate Ethics Monitor to review and report on its compliance with government contracting requirements.
