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Virginia companies settle false claims, kickback allegations

September 23, 2021 GMT

ALEXANDRIA, Va. (AP) — Two Virginia companies have agreed to pay more than $1 million to settle allegations that they received kickbacks linked to federal government contracts reserved for certain small businesses, the U.S. Department of Justice said Thursday

Acting U.S. Attorney Raj Parekh said in a news release that Index Systems of Fairfax and Capital Consulting Group of Arlington agreed that Index would use its specific certification to bid on a government contract on which Capital Consulting was not eligible to bid.

Index was certified by the Small Business Administration as an 8(a) small business, meaning that it was owned and operated by a socially or economically disadvantaged citizen. CCG lacked that certification, the news release said.

According to Parekh, Index and CCG allegedly agreed to subcontract all the work on the government contract to CCG in exchange for an amount calculated by each hour of work subcontracted to CCG, and CCG allegedly paid Index the agreed upon kickback amount when the work was subcontracted to them.

The government also alleged that between 2018 through 2020, Index had another kickback arrangement with another company which also settled in July in response to similar allegations.