Charlie Roberts recently obtained the dismissal of a False Claims Act lawsuit filed by the United States against Kenneth Carter. The Government alleged Mr. Carter, who has since passed, was part of a fraudulent scheme with Lee Strock, Cynthia Ann Golde, and Strock Contracting to set up a company, Veteran Enterprises Company, Inc. (“VECO”), as a service-disabled veteran owned small business (“SDVOSB”) in order to obtain and profit from construction contracts set aside for SDVOSBs. The Government alleged VECO was a sham and Mr. Strock, who is not a disabled veteran, controlled the day-to-day and long-term business operations. Mr. Roberts filed a motion to dismiss the lawsuit against Mr. Carter on the grounds that the Government failed to sufficiently allege a False Claim Act claim against Mr. Carter. Judge Geraci, Chief Judge for the United States District Court for the Western District of New York, agreed and dismissed the claims against Mr. Carter. Judge Geraci found the government’s general group allegations against the “defendants” were insufficient to show that Mr. Carter personally knew that any representations as to VECO’s SDVSOB status were false. Judge Geraci also agreed the government did not allege Mr. Carter obtained any financial benefits from contracts performed by VECO – an allegation that might suggest a motive for committing fraud.
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