LOS ANGELES - IMEG Corp., an engineering and construction services firm, has agreed to pay $5.27 million to settle allegations that one of its predecessor entities defrauded the government by conspiring to submit fraudulent bills related to contracts designated for small businesses and small businesses owned by service-disabled veterans, the Justice Department announced today.
IMEG Corp., headquartered in Rock Island, Illinois, was formed in January 2017 through the merger of engineering firms TTG Corporate and KJWW Corp.
In August 2009, TTG, a large engineering services company, formed a company named TTG Schwab, Inc. - later known as Schwab Engineering, Inc. - with Jerome Schwab, a service-disabled veteran. The federal government, primarily the U.S. Department of Veterans Affairs, awarded Schwab Engineering over a dozen contracts that had been “set aside" for service-disabled, veteran-owned small business (SDVOSB) and small businesses.
On paper, Jerome Schwab was the majority owner, and later the sole owner, of Schwab Engineering. In reality, TTG provided nearly all the staffing and support, including financial and administrative services, for the federal set-aside contracts it was awarded - which violated the rules of the set-aside programs. TTG received up to 95 percent of the fees that Schwab Engineering earned from the SDVOSB and small business set aside contracts, according to the settlement.
Following the TTG-KJWW merger in 2017, IMEG discovered the wrongful conduct, informed the government, and has cooperated with federal authorities in this matter.
The settlement in this matter was finalized today. The claims resolved by the settlement are allegations only; there has been no determination of liability.
The settlement was the result of a coordinated effort by the U.S. Department of Veterans Affairs, Office of Inspector General; the U.S. Small Business Administration, Office of Inspector General; and the U.S. Department of Defense, Defense Criminal Investigative Service.
Assistant United States Attorney Donald Yoo of the Civil Fraud Section represented the government in this matter.
Source: U.S. Department of Justice, Office of the United States Attorneys
