LB&B Associates to Settle False Claims for $7.8M; Whistleblowers to Get $1.5M

LB&B Associates Inc. and its principals, Lily A. Brandon and F. Edward Brandon, have agreed to pay $7.8 million to the federal government to resolve allegations that they knowingly submitted or caused the submission of false claims to the Small Business Administration’s (SBA’s) 8(a) Business Development Program for Small Disadvantaged Businesses, the U.S. Department of Justice announced today.

The government alleged that in seeking certification under SBA’s 8(a) Program, LB&B falsely represented that Lily Brandon – who satisfied the criteria for a socially and economically disadvantaged person under the program – controlled the operations of LB&B, when she did not.  Securing 8(a) certification allowed LB&B to obtain 8(a) set aside contracts from various government agencies.  Throughout the performance of these contracts, Lily Brandon allegedly failed to exercise actual control over LB&B’s operations, a key component to qualifying for the set aside contracts. 

The civil settlement resolves a lawsuit filed by Steven O. Sansbury and James T. Buechler, former employees of LB&B, under the whistleblower provision of the False Claims Act, which permits private parties, known as relators, to file suit on behalf of the government for false claims and to share in any recovery.  The act permits the government either to intervene in and take over the whistleblowers’ suit, or to allow the whistleblowers to pursue the action.  In addition to alleging LB&B’s improper receipt of 8(a) set aside contracts, Mr. Sansbury and Mr. Buechler alleged that LB&B made false claims in connection with contracts it obtained pursuant to the SBA’s Mentor-Protégé Program, which allows participants to obtain set aside contracts following LB&B’s graduation from the 8(a) Program.  The United States intervened in the whistleblowers’ 8(a) claims but not the Mentor-Protégé claims.  The settlement resolves both claims, and Mr. Sansbury and Mr. Buechler will recover a total of $1.5 million of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.