Contractor agrees to pay $750,000 to settle False Claims Act allegations

ALEXANDRIA, Va. – Stephen McLeod d/b/a A&S Contracting, of Hayes, Virginia, agreed to pay $750,000 to settle False Claims Act allegations that he engaged in a pattern of inflating costs and concealing use of subcontractors on work orders conducted for the United States Postal Service (USPS).

McLeod, a sole proprietor doing business as A&S Contracting, performed repair and maintenance service projects at U.S. postal facilities throughout Virginia, Maryland, North Carolina, and the District of Columbia.

The government alleged that some thirty work orders contained false information and resulted in overcharges to the USPS.

In one example, McLeod agreed to perform electrical work at a USPS post office in Norton, Virginia, even though McLeod did not have the appropriate license to perform electrical work. He nonetheless billed $9,570 for performance of the work order, including labor he did not perform and materials he did not provide. McLeod impermissibly subcontracted the work to another company and falsely certified in an invoice and associated documentation submitted to USPS that A&S performed the work.

In another instance, McLeod, acting as A&S Contracting, agreed to patch potholes in a USPS post office parking lot in Wise, Virginia. The proposal submitted by McLeod falsely stated that A&S would perform the work, and did not reveal that he intended to retain a subcontractor for the job. The proposal also included charges for material and equipment not provided by McLeod, nor by McLeod acting as A&S. McLeod subcontracted the work to another company that performed all the pothole patching work at the USPS post office parking lot. The subcontractor charged McLeod $12,500 for its work and, in turn, McLeod, acting as A&S, charged USPS $20,385 for the work order.

The resolution obtained in this matter was the result of a coordinated effort between the U.S. Attorney's Office for the Eastern District of Virginia and the USPS Office of Inspector General.

The matter was investigated by Assistant U.S. Attorney Gina Kim and USPS Office of Inspector General Special Agent Darrin Dixon.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.

The civil claims settled are allegations only; there has been no determination of civil liability.