Confluence Corp. Settles Allegations of False Claims for Payment of Work Performed by Unqualified Welders

HONOLULU - United States Attorney Clare E. Connors announced that Confluence Corp. d/b/a Regal Service Company ("Regal"), a Hawaii corporation and Department of the Navy contractor, has agreed to pay $300,000 to settle allegations that it violated the False Claims Act by knowingly submitting false claims for payment for work performed by unqualified welders on the USS Chung Hoon, USS John Paul Jones, and USS William P. Lawrence at the Pearl Harbor Naval Shipyard and Intermediate Maintenance Facility between January 2020 and October 2021.

The United States alleged that after an initial review of Regal's contract work, the Navy determined Regal had used welders lacking required certifications to perform the identified tasks. During a full-scale review of Regal's work, the Navy confirmed the welders were unqualified and also determined that the welds were deficient. The United States further alleged that Regal provided the Navy falsified documents to make it appear as though its welders had obtained the required certifications when in fact they had not.

The $300,000 payment from Regal includes $150,000 in restitution to cover costs incurred by the Navy to address the faulty welds.

"When anyone - an individual or corporation - does business with the United States of America, the falsification of documents and other false representations will not be tolerated," said Clare E. Connors, the United States Attorney for the District of Hawaii. "The failure to perform the terms of a government contract risks harming our servicemembers, and our office will continue to hold companies accountable for such misconduct."

"Submitting false claims for work performed by unqualified welders harms operational readiness and endangers warfighter safety," said Special Agent in Charge Greg Gross of the Naval Criminal Investigative Service (NCIS) Economic Crimes Field Office. "NCIS appreciates our investigative partners for their continued efforts to help protect the Department of the Navy from threats posed by such fraud."

"Department of Defense (DoD) contractors bear a solemn trust to earnestly fulfill their contractual terms. Our military readiness, as well as the health and safety of our brave men and women in uniform, depend upon it," said Stanley A. Newell, Special Agent-in-Charge of the DoD, Office of Inspector General's, Defense Criminal Investigative Service (DCIS), Transnational Operations Field Office. "The dedicated professionals of DCIS and our partner agencies will work tirelessly to hold those who violate the public trust accountable."

The False Claims Act allows for treble damages, and civil penalties of up to $27,894 per violation. DCIS's Transnational Operations Field Office and NCIS's Economic Crimes Field Office West investigated the case.

Assistant United States Attorney Sydney Spector handled the matter.

The claims against Regal resolved by the settlement are allegations only and there has been no determination of liability.