Dallas-Based Baron & Budd Announces Historic $48.5 Million Settlement in Whistleblower Case Alleging Small Business Fraud by TriMark USA

A whistleblower represented by Baron & Budd provided the critical inside information to the DOJ that resulted in the record-breaking small business fraud settlement.

DALLAS--(BUSINESS WIRE)--Today, the Dallas-based national law firm of Baron & Budd announced that it helped secure a historic $48.5 million settlement against TriMark USA, LLC and related entities—the largest amount ever recovered in the history of False Claims Act litigation involving allegations of small business fraud. The recovery eclipses the previous record settlement involving small business fraud—$37 million against Atlantic Diving Supply and related entities—which also resulted from a whistleblower lawsuit filed by Baron & Budd.

The success of this case exemplifies the importance and the strength of the public/private partnership between whistleblowers and the Department of Justice. The DOJ has made it very clear that it is committed to protecting opportunities for small businesses, and whistleblowers are a vital asset in the identification and prosecution of these fraud cases.

The lawsuit against TriMark was initiated by a whistleblower represented by Baron & Budd who alleged that TriMark—the nation’s largest restaurant supply company with a local distribution facility near DFW airport—violated the False Claims Act by illegally obtaining government contracts set aside for small businesses owned by service-disabled veterans. According to the lawsuit, TriMark is a large business under the size standards established by the Small Business Administration, with more than 1,000 employees and more than $400 million in annual revenue.

As a large business, TriMark is ineligible to participate in valuable government contracts set aside for small businesses. TriMark used multiple small businesses in an illegal “pass-through” scheme whereby the small businesses won government contracts with TriMark’s assistance, then passed through the work on those contracts to TriMark, which was able to collect tens of millions of dollars earmarked for small businesses. In exchange for their cooperation, TriMark paid the small businesses, typically 1% to 3% of the contract value, for passing through the work.

“In light of the economic downturn caused by the COVID-19 pandemic, it is more important than ever to put a stop to fraudulent schemes that rob legitimate small businesses of contracting opportunities. Fortunately, a brave whistleblower stepped forward to protect taxpayer dollars and stand up for small businesses. This whistleblower revealed brazen misconduct that called for a bold response, and the record-breaking settlement here should serve as a warning to those who threaten the integrity of the small business government contracting industry,” said Andrew Miller, a shareholder in the qui tam group at Baron & Budd.

Today’s historic $48.5 million settlement surpasses the previous record-high settlement involving small business fraud under the FCA. In 2019, the government recovered $37 million to resolve claims that Atlantic Diving Supply (ADS), certain executives, and related entities illegally obtained government contracts set aside for small businesses. The whistleblowers in the ADS matter, which was at the time the largest small business fraud case in FCA history, were also represented by the qui tam team at Baron & Budd.

About Baron & Budd, P.C.

Baron & Budd, P.C. is among the largest and most accomplished plaintiffs’ law firms in the country. With more than 40 years of experience, Baron & Budd has the expertise and resources to handle complex litigation throughout the United States. As a law firm that takes pride in remaining at the forefront of litigation, Baron & Budd has spearheaded many significant cases for hundreds of entities and thousands of individuals. Since the firm was founded in 1977, Baron & Budd has achieved substantial national acclaim for its work on cutting-edge litigation, trying hundreds of cases to verdict and settling tens of thousands of cases in areas of litigation as diverse and significant as dangerous and highly addictive pharmaceuticals, defective medical devices, asbestos and mesothelioma, California wildfires and environmental contamination, fraudulent banking practices, e-cigarettes, motor vehicles, federal and state whistleblower cases, and other consumer fraud issues.