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ReadyOne Industries Agrees to Settle False Claims Allegations for $5 Million

Date Published
Oct 31, 2012

Earlier this month, the Department of Justice announced a $5 million settlement it reached with ReadyOne Industries Inc., a non-profit organization that manufactures apparel, boxes, and other products.  ReadyOne, previously known as the National Center for Employment of the Disabled (NCED), is headquartered in El Paso, Texas.  The company was accused of violating the False Claims Act by submitting false certifications regarding the number of hours employees with severe disabilities worked on government contracts.

ReadyOne was a member of the AbilityOne Program, which is managed by the federal agency the Committee for Purchase From People Who Are Blind or Severely Disabled.  According to its website, AbilityOne is “a Federal initiative to help people who are blind or have other significant disabilities find employment by working within a national network of over 600 Nonprofit Agencies that sell products and services to the U.S. government.”  Programs like AbilityOne help frequently disadvantaged individuals to procure stable employment, which in today’s economy is extraordinarily important.

For non-profit organizations to participate in the AbilityOne Program, they are required to ensure that their blind or severely disabled employees perform 75% of their annual direct labor hours on some government contracts.  ReadyOne was accused of employing numerous non-disabled employees on government contracts and falsely reporting their labor hours in order to comply with AbilityOne’s requirements.

Whistleblower Michael Ahumada filed his qui-tam lawsuit against ReadyOne in 2006 and alerted the government to their alleged fraud.  As a former ReadyOne employee, Ahumada was able to provide insider information that helped the government investigate the case.  As the whistleblower, Ahumada may receive anywhere between a 15% to 30% share of the government’s recoveries from the settlement.

For more information on how to file a qui tam lawsuit, and for a free and confidential consultation, contact the experienced attorneys at Tycko & Zavareei today.

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