ReadyOne Industries Settles Whistleblower Case for $5 Million

Texas-based ReadyOne Industries, Inc. (“ReadyOne”), formerly known as the National Center for Employment of the Disabled, has agreed to pay $5 million to the federal government to settle allegations that it committed False Claims Act violations. The allegations were initiated in 2006 by whistleblower Michael Ahumada, a former ReadyOne employee. Ahumada filed a whistleblower complaint in the Eastern District of Virginia under the qui tam provisions of the False Claims Act.

ReadyOne is a community-based nonprofit manufacturer of various products including apparel and boxes. ReadyOne participated in the AbilityOne Program which provides employment opportunities in the manufacturing industry for blind and severely disabled individuals. AbilityOne is managed by the Committee for Purchase From People Who Are Blind or Severely Disabled (“Committee”), a federal agency.

As a participant in the AbilityOne Program, ReadyOne was required to have 75% of the labor on certain government contracts performed by employees who are blind or severely disabled. According to the whistleblower, ReadyOne employed a large number of non-disabled employees.

The whistleblower’s Complaint alleged that, between 2000 and 2006, ReadyOne submitted falsified reports to the Committee certifying that it met the 75% labor requirement, when in fact, it failed to account for the hours worked by the non-disabled employees in determining the ratios. According to the Justice Department, ReadyOne violated the False Claims Act when it submitted the false certification of hours to the Committee.

The whistleblower will receive a portion of the settlement as his reward under the qui tam provisions of the False Claims Act.