El Paso-based ReadyOne Industries Inc. has agreed to pay $5 million to resolve allegations that it knowingly submitted false certifications regarding the annual percentages of direct labor hours performed by people with severe disabilities, the Justice Department announced today.
ReadyOne, previously known as the National Center for Employment of the Disabled (NCED), is headquartered in El Paso, Texas, and is a manufacturer of apparel, boxes and other products. The company was a participant in the AbilityOne Program, which creates employment opportunities for people who are blind or have other significant disabilities in the manufacture and delivery of products and services to the federal government.
The AbilityOne Program requires that 75 percent of all annual direct labor hours on certain government contracts be performed by employees who are blind or severely disabled. However, the United States alleges that between 2000 and 2006, NCED employed a large number of non-disabled employees to work on contracts for the manufacture of archival boxes, apparel and other items, and did not appropriately account for their hours as part of the overall ratios it certified and submitted to the committee.
“The AbilityOne program is an important source of employment for people who are blind or have other significant disabilities,” said Stuart Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. “False certifications undermine that program and will not be tolerated.”
The settlement arises from a qui tam, or whistleblower, lawsuit filed in the Eastern District of Virginia under the False Claims Act by Michael Ahumada, a former employee of NCED. Under the qui tam provisions of the False Claims Act, a private citizen may file actions for false claims on behalf of the United States and share in any recovery.
The government’s investigation was conducted by the U.S. Attorney’s Office for the Eastern District of Virginia, the Civil Division of the U.S. Department of Justice, the General Services Administration and the Committee for Purchase from People Who Are Blind or Severely Disabled. The claims settled by this agreement are allegations only, and the defendant has not admitted to any wrongdoing.
Tina Ballard, Executive Director and CEO of the Committee for Purchase From People Who Are Blind or Severely Disabled, praised the Department of Justice’s persistence and professionalism in resolving this matter. “AbilityOne Program integrity is paramount. We will continue to monitor and ensure that the people the AbilityOne Program was designed to employ are, in fact, the ones benefitting from this program.”
The $5 million settlement is a significant blow to ReadyOne Industries, which will have to pay a hefty fine for its alleged wrongdoing. The company’s actions have undermined the integrity of the AbilityOne Program, which was designed to provide employment opportunities for people with disabilities.
This case serves as a reminder that the Department of Justice will not tolerate false certifications and will vigorously investigate and prosecute those who engage in such conduct. As Acting Assistant Attorney General Delery stated, “False certifications undermine that program and will not be tolerated.”
The settlement highlights the importance of whistleblower lawsuits in uncovering and exposing wrongdoing. Michael Ahumada, the former employee of NCED, filed the qui tam lawsuit under the False Claims Act, which allowed him to bring attention to the alleged wrongdoing and share in any recovery.
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