A settlement has been reached to resolve False Claims Act allegations against North American Power Group Ltd.
The allegations arose from a lawsuit that claimed North American Power Group Ltd and its owner and president, Michael Ruffatto, submitted fraudulent claims under a cooperative agreement with the Department of Energy and National Energy and Technology Laboratory.
According to the government, allegedly, on December 8, 2009, National Energy and Technology Laboratory (NETL) awarded a $14 million cooperative agreement to North American Power Group Ltd (NAPG) for a Carbon Site Characterization Project to collect and analyze data, as well as to design and implement carbon sequestration wells at the Two Elk Energy Park (TEEP) located in Campbell County, Wyoming. Between December 2009 and January 2012, Michael Ruffatto served as NAPG’s representative for the cooperative agreement and was responsible for authorizing the submission of the company’s invoices to NETL for payment. During that time, NAPG was paid approximately $5.7 million by NETL for costs purportedly related to the project. In fact, however, none of the claimed costs were for work associated with the project and instead reflected expenses incurred by Michael Ruffatto to pay legal fees, car payments, jewelry, international travel and other personal items unrelated to the scope of work under the cooperative agreement. The Department of Energy (DOE) suspended the cooperative agreement in January 2012 after discovering the fraudulent claims.
“This $14.4 million False Claims Act settlement is the largest NETL settlement in the history of western Pennsylvania,” said U.S. Attorney Scott W. Brady of the Western District of Pennsylvania. “Protecting taxpayer funds is an important priority of our office and this settlement, along with yesterday’s sentence, demonstrate we will use every tool in our arsenal to prevent and deter wrongful expenditures of government monies.”
North American Power Group Ltd and Michael Ruffatto have now agreed to settle the allegations for $14.4 million. Furthermore, Michael Ruffatto has pled guilty to one felony count of intentional submission of false claims against the United States. Michael Ruffatto has been sentenced to 18 months in prison, along with three years of supervised release and a $50,000 fine and ordered to pay $2 million in restitution.
