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A.G. Schneiderman Announces $341,000 Settlement With Johnson Controls For Forged Training Certificates

Johnson Controls Acted Promptly to Self-Report Forgeries of Key Training Certificates Related to NY State Contracts, Cooperated With AG’s Investigation

Attorney General Eric T. Schneiderman recently announced a $341,000 settlement with Johnson Controls, an industrial and technology corporation, which submitted falsified training certifications in connection with bids for New York State contracts in the Albany area. Upon becoming aware of the misconduct, Johnson Controls self-reported, alerting the Attorney General’s office that one of Johnson Controls’ employees had submitted several forged training certifications in connection with bids for a heating, ventilation, and air conditioning (“HVAC”) maintenance contract for the State Department of Health’s Wadsworth Laboratory and the Harriman State Office Building.

As part of the settlement, Johnson Controls admitted wrongdoing and agreed to pay back the $299,000 in profits earned under the relevant contracts, in addition to $42,000 in applicable New York State False Claims Act penalties. Johnson Controls also agreed to certain reporting requirements related to its technicians that service State contracts.

“New York taxpayers deserve honesty and integrity in the State procurement process, and my office will continue to ensure that companies are held accountable,” said Attorney General Schneiderman."It’s far better for violators to voluntarily disclose wrongdoing than to wait for our office to come knocking.”

These training certifications were supposed to serve as an important assurance that the bidding company has staff qualified to properly and safely execute the contract for HVAC maintenance. Yet Johnson Controls submitted false certifications for training sessions that its employees did not in fact attend. In some instances, the training session listed never even occurred. The Johnson Controls employee responsible for the forgery printed the certifications to resemble actual certifications that a qualified technician might receive.

The settlement is notable in that it was initiated by Johnson Controls’ corporate self-disclosure, pursuant to the New York State False Claims Act (N.Y. State Fin. Law § 189(2)). The law provides that a person or entity that has violated the False Claims Act may receive a reduction in the maximum assessment of damages if the person or entity makes a timely and complete disclosure to the Attorney General’s office about the misconduct. In this instance, upon receiving generalized information of potential misconduct, Johnson Controls conducted an internal compliance review and informed the Attorney General’s office of the false certifications.

In this instance the State found that: (i) Johnson Controls voluntarily disclosed the conduct; (ii) there was no evidence available that suggests senior management of Johnson Controls were aware or involved in the issuance of the forged certifications; (iii) Johnson Controls took remedial measures with respect to the key employee involved; (iv) Johnson Controls cooperated with the Attorney General’s office in the course of its investigation; and (v) Johnson Controls has otherwise fulfilled its obligations with respect to the relevant contracts.

Attorney General Schneiderman expressed his thanks to the Office of the New York State Inspector General for its assistance in this investigation.

Assistant Attorney General Justin Wagner of the Taxpayer Protection Bureau led the investigation, with the assistance of Legal Support Analyst Bianca M. LaVeglia. The Taxpayer Protection Bureau is led by Bureau Chief Thomas Teige Carroll and Deputy Bureau Chief Scott J. Spiegelman. The Bureau is part of the Economic Justice Division, led by Executive Deputy Attorney General for Economic Justice Manisha M. Sheth.