Two New York contractors settle veteran contracting case for $21.3 million
Broadway Electric Inc. and Cornerstone Contracting Inc. will pay $21.3 million to resolve federal allegations that they used veteran-owned firms as fronts to obtain government contracts reserved for service-disabled veteran-owned small businesses. The Justice Department announced the settlement on June 9, 2026.
citizen.co.zaTwo New York-based electrical contractors and their top executives agreed to pay $21.3 million to resolve federal False Claims Act allegations that they improperly obtained government contracts reserved for service-disabled veteran-owned small businesses, the Justice Department announced.
, Chief Executive Officer John Oehler and President Christian Blake admitted responsibility under the settlement for a multi-year scheme in which they used legitimate veteran-owned firms as pass-through entities to obtain contracts for which the contractors were not eligible.
Scheme details Neither Oehler nor Blake is a service-disabled veteran.
From approximately April 2017 through May 2025, personnel at the two companies identified contracting opportunities, prepared bids submitted under the names of qualifying small businesses, and controlled project execution, staffing and financial administration, according to the settlement agreement.
The purported small businesses received fixed payments of roughly one to three percent of total contract value while the bulk of contract revenue flowed back to Broadway and Cornerstone. Employees also used small-business email domains and exercised signature authority in communications with federal agencies on behalf of the fronting firms.
At least one service-disabled veteran-owned small business owner raised compliance concerns during the scheme, but the defendants did not make material changes to the arrangement.
Whistleblower role The settlement resolves claims brought in part by two whistleblowers—an Air Force veteran and an executive at a qualifying veteran-owned firm—who filed suit under the qui tam provisions of the False Claims Act. The pair will receive $3.67 million of the settlement proceeds.
The case was investigated by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Northern District of New York, the Department of Veterans Affairs Office of Inspector General, the Defense Criminal Investigative Service, the Department of the Army Criminal Investigation Division, the General Services Administration Office of Inspector General, the Small Business Administration Office of Inspector General and the Small Business Administration Office of General Counsel.
