Shaw University and contractor settle dispute with federal government over false claims

Shaw University and a local contractor have agreed to a $316,900 settlement after a federal investigation looked into allegations of false claims made to secure U.S. Department of Education grant money, according to U.S. Attorney Robert Higdon, Jr.

The settlement was announced Monday in a news release from Higdon, the U.S. attorney in the Eastern District of North Carolina.

According to the release, an investigation prompted by a whistleblower complaint showed that the contractor, Freddy Novelo, and an unnamed former vice president at Shaw, “fabricated bids for a construction contract to evade the Department of Education’s competitive bidding requirements.”

There was no judicial finding regarding the allegations or admission of guilt, the news release said. Shaw University’s current administration fully cooperated in resolving the issue, the U.S. Attorney’s Office said.

The government recovered the money in question, as well as penalties, the release said.

“This settlement demonstrates our firm commitment to protect taxpayer money and to guard the integrity of federal grant programs,” said a prepared statement by Higdon. “Universities, contractors, and all those seeking federal funds are required to make honest claims for payment. Those who do not will be held accountable.”

This story was originally published November 12, 2018 at 2:54 PM.