US Ex Rel. Ervin and Assoc. v. Hamilton SEC.
370 F. Supp. 2d 18 | District Court, District of Columbia | 2005
What This Case Means for Subcontractors
Hamilton Securities Group was found liable under the False Claims Act for submitting false claims to HUD involving a note sale. The company used the wrong financial model (revenue model instead of unpaid principal balance model) to calculate project values, resulting in $1.5 million in damages. The court enforced the judgment against Hamilton, holding them responsible for knowingly submitting inaccurate financial data to a federal agency.
Key Takeaways
- •Use the correct calculation methods and models when submitting claims to government agencies—using the wrong methodology, even if unintentional, can trigger False Claims Act liability
- •Double-check all financial data and formulas before submitting claims to HUD or other federal agencies; errors can result in significant damages and penalties
- •Keep detailed documentation of which models and methods you used for any calculations submitted to government clients, as this becomes critical evidence if disputes arise
Hamilton reported results $1,511,244.00 less than optimal because revenue model was used instead of unpaid principal balance model.
Frequently Asked Question
What happens if I submit a claim to a government agency using the wrong calculation method?
You could face False Claims Act liability, even if the error wasn't intentional. The court will examine whether you used the correct methodology required by the contract or agency. Damages can be substantial—in this case, $1.5 million—so always verify your calculation methods match what the government requires before submitting any claims.
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