Columbia-based firm reaches $7.8M settlement with DOJ

A Columbia-based diversified services company will pay the U.S. government $7.8 million to settle allegations it falsely claimed to be a woman- and minority-owned company to win federal contracts under a program to assist small disadvantaged businesses.

In its federal contract applications, LB&B Associates Inc. stated that it qualified for the Small Business Administration’s 8(a) contract set-aside program because its president, Lily Brandon, a woman of Asian descent, controlled the company, when in reality she did not, the U.S. Justice Department alleged under the federal False Claims Act.

LB&B admitted no wrongdoing in agreeing to the settlement.

The accord also resolves a whistleblower lawsuit brought against LB&B by two former employees who worked most recently on the company’s projects at Goddard Space Flight Center in Greenbelt and at the Food and Drug Administration in Laurel.

Steven O. Sansbury and James T. Buechler will share a $1.5 million portion of the $7.8 million recovery under the False Claims Act’s reward provision, the Justice Department said in announcing the settlement Monday.

“The purpose of the 8(a) program is to assist small disadvantaged businesses to compete in the American economy,” Benjamin C. Mizer, who heads the department’s civil division, said in a statement. “The Justice Department is committed to making sure that those who participate in 8(a) contracts do so fairly.”

LB&B’s alleged wrongdoing came to light through the lawsuit Sansbury and Buechler brought against LB&B 11 years ago in federal district court.

Sansbury worked on a five-year female-minority set aside contract for LB&B at Goddard. Buechler had worked on five different federal contracts for LB&B — including assignments at Goddard, the U.S. Geological Survey Center, and the National Archives — before serving as the company’s assistant project manager at FDA, according to the lawsuit.

During their time at LB&B, Sansbury and Buechler had direct contact with Lily Brandon and F. Edward Brandon, her husband, co-owner and the person who was in fact running the day-to-day operations of the company, said Jay P. Holland, the whistleblowers’ attorney.

F. Edward Brandon is neither female nor a member of a historically disadvantaged minority group and thus did not qualify LB&B for set-aside contract consideration under SBA’s 8(a) Business Development Program for Small Disadvantaged Businesses, added Holland of Joseph, Greenwald & Laake P.A. in Greenbelt.

The settlement sends “an extraordinarily important message” that whistleblowers, the federal government and private attorneys will “police” government contractors to ensure their compliance with the federal False Claims Act, Holland said, adding that whistleblowers — or “relators” in False Claims Act parlance — are the most important.

“It is highly unlikely the government would have known anything but for them coming forward,” Holland said of Sansbury and Buechler.

Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia added in a statement that “the basic purpose of this federal program is undermined when contractors falsely claim to be a small or disadvantaged business.”

He added that “working with relators and federal investigators, we will do all that we can to act against those who illegitimately bill the American taxpayers.”

LB&B’s chief operating officer, David Van Scoyoc, did not return telephone messages Tuesday seeking comment on the settlement.