Alaskan Native Sub KICD Pays $2.025 Million to Resolve FCA-Kickback Case

May 6, 2019.

The Office of U.S. Attorney for the Western District of Texas last week announced a $2.025 million settlement in a False Claims Act (FCA) action brought by VSG Client, Susan Campbell.  In a complaint filed in January 2010, Ms. Campbell alleged that her former employer, KIC Development, LLC (KICD), an Arlington-Virginia based government contractor, and several individuals working for KICD engaged in a scheme to obtain inflated contracts with the U.S. Army Corps of Engineer through bribes and kickbacks, in violation of the FCA.  As a majority-owned and controlled subsidiary of Kikiktagrut Inupiat Corporation (KIC), an Alaskan Native Corporation, KICD qualified for contracts with the federal government for which it did not have to engage in competitive bidding.   Upon joining Ms. Campbell’s lawsuit, the United States alleged that KICD’s executives, who worked out of KICD’s offices in Arlington, Virginia, allegedly padded KICD’s bids for sole source contracts to allow not only for the payment of bribes and kickbacks to James Tuskan, who handled procurement matters for the U.S. Army Corps of Engineers at Fort Bliss in Texas, but also the embezzlement of funds by KICD executives Anthony Acri and Christine Hayes and KICD’s local manager in Texas, Earl Hall.  The individual defendants allegedly diverted more than $3 million in government funds to personally enrich themselves.

After Ms. Campbell filed her complaint, the United States initiated criminal prosecutions of the individuals engaged in the scheme, ultimately sending Acri, Hall, Hayes and Tuskan to prison and requiring them to pay substantial criminal fines.   The United States subsequently intervened in Ms. Campbell’s qui tam action, negotiating the $2.025 million resolution with KICD and KIC, and bringing civil claims against the individual defendants in its own complaint in her action.

Ms. Campbell will receive 22% of the United States’ recovery from KICD as a reward for bringing the information forward.

See Ms. Campbell’s Complaint here.

See the Government’s Complaint here

See the article in the El Paso Times here.

See the Government’s Press Release here.