Veterans Disability Info Blog

Whistleblower Wins $857K Cash For Exposing Hayner Hoyt SDVOSB Fraud

Are you an employee of a service-disabled veteran-owned small business who suspects fraud against the government set-aside contract program? Whistleblower John Rubar recently won $857,000 for reporting allegations that New York-based construction company, Hayner Hoyt, fraudulently obtained a service-disabled veteran-owned small business (SDVOSB) contract.

If you have knowledge of fraud against the SDVOSB program, you too could be eligible for a large cash award.

Government Set-Aside Contracts Help Veteran-Owned Businesses Compete

Government-funded service-disabled veteran-owned small business contracts are a wonderful resource our nation provides to help our heroic veterans succeed in business. The government sets aside 3% of its small business contracts specifically for service-disabled veterans with an entrepreneurial spirit and a desire to help grow the American economy.

Unfortunately, large companies and non-eligible businesses attempt to use fraud and deceit to obtain these contracts for themselves. Our veterans’ disability benefits law firm has partnered with a SDVPSB whistleblower law team to represent individuals willing to fight SDVPOSB fraud.

The government pays these whistleblowers large cash awards – often in the hundreds of thousands to millions of dollars – for their willingness to come forward with information on SDVOSB fraud.

Feds Pay John Rubar $875,000 For Reporting SDVOSB Fraud

Consider the case of John Rubar. Rubar worked for the Syracuse, New York-based construction company Hayner Hoyt Corporation when he claims he discovered that the company was working under an SDVOSB contract without being eligible.

To be eligible for a SDVOSB contract, a service-disabled veteran must be the primary owner of the business, control and manage the day to day operations and make the strategic decisions.

John Rubar alleged the Hayner Hoyt company created a sham company – called 229 Contructors LLC – and hired service-disabled veteran, Ralph Bennett, as president. Rubar alleges Bennett was not involved in making any Hayner Hoyt business decisions – instead he merely handled the Hayner Hoyt tool inventory and plowed snow on Hayner Hoyt property.

John Rubar decided to file a whistleblower lawsuit against Hayner Hoyt in 2014. According to Rubar, rather than service-disabled veteran Bennett making the decisions, Hayner Hoyt CEO Gary Thurston and his son Jeremy Thurston made all the decisions.

In addition, Hayner Hoyt obtained its SDVOSB contract by allegedly making false statements and certifications representing that 229 Constructors met all SDVOSB requirements.

In March 2016, John Rubar’s whistleblower lawsuit paid off. Because Rubar’s information resulted in a $5 million False Claims Act settlement with Hayner Hoyt, he received a whistleblower cash award of $875,000. More importantly, he helped out all of the legitimate service-disabled veteran-owned small businesses who must compete for these valuable SDVOSB contracts.

Common Types Of Fraud Against SDVOSB Program

The Veterans Benefits Act of 2003 created the service-disabled veteran-owned small business procurement program, which allows contracting officers to restrict SDVOSB competition.

These contracts are set-aside for businesses with less than 500 employees and less than $5,000,000 annual revenue that are (1) 51% owned by a service-disabled veteran who (2) holds the highest business position and (3) controls all decision making, day-to-day management and business operations administration (in the case of permanent and severe disability, a caregiver or spouse can control the business).

Any company working under or attempting to obtain a SDVOSB contract who does not meet these criteria may be submitting false claims for payment to the government. Companies may attempt to defraud the SDVOSB program in various ways, including:

  • Reporting false employee numbers or earnings
  • Falsely claiming a service-disabled veteran owns, operates and controls the company
  • Misrepresenting a person as having a service disability validated by VA or Department of Defense
  • Creating a business, making a service-disabled vet the owner, then passing the work on to a non-qualifying company.

How to Help Stop SDVOSB Fraud And Win A Cash Whistleblower Award

Companies who submit fraudulent claims for payment to the government are likely violating the federal False Claims Act. When a whistleblower reports information on SDVOSB fraud that leads to government recovery, the False Claims Act pays that whistleblower between 15% and 30% of the total recovery amount.

Our veterans’ benefits law firm has partnered with a team of SDVOSB whistleblower lawyers to help put a stop to the waste, fraud and abuse of SDVOSB funds and maximize cash awards for SDVOSB whistleblowers. If you feel your employer or a competitor company has fraudulently obtained a SDVOSB contract, call us to learn whether your information qualifies you for a cash whistleblower award in a free, fully confidential consultation.

We are Here to Help

If you are having trouble obtaining benefits, contact us online or at 888.878.9350 to discuss your case.