After Admitting to Creating Front Company, North Florida Shipyards to Pay $1 Million

After admitting in April 2014 to creating a front company, in order to obtain Cost Guard contracts designated for Service Disabled Veteran Owned Small Business (SDVOSB), North Florida Shipyards as well as its president, Matt Self, have agreed to pay the United States $1 million to resolve False Claim Act allegations. These allegations were first brought to light by the filing of a qui tam Complaint by whistleblowers Robert Hallstein and Earle Yearger. Hallstein and Yearger will share in $180,000 of the $1 million settlement.

The United States alleges that North Florida created Ind-Mar Services Inc. as a contracting vehicle to obtain work from the Coast Guard designated for SDVOSB. To qualify as a SDVOSB, a company must be operated and managed by service disabled veterans who also must perform at least 51% of the labor. While the Coast Guard contracted with Ind-Mar, the work was performed by North Florida and North Florida received all the profits from the contracts. The government further alleges that had they known that Ind-Mar was simply a front company, they never would have awarded them the contracts to repair five Coast Guard ships.

In December 2013, the Small Business Administration suspended North Florida, Matt Self and three others from government contracting and in April 2014, they entered into an administrative agreement with the SBA admitting to creating and operating Ind-Mar in violation of its Coast Guard contracts and SBA statutes and regulations. The investigation was coordinated by the Civil Division, the U.S. Attorney’s Office for the Middle District of Florida, the Department of Homeland Security’s-Office of Inspector General and the SBA Office of Inspector General.

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