Broadway Electric Inc., Cornerstone Contracting Inc., and two company executives have agreed to pay $21.3 million to resolve False Claims Act allegations that they fraudulently obtained federal contracts reserved for service-disabled veteran-owned small businesses, the Department of Justice announced June 9, 2026 [1]. The settlement resolves claims against Broadway Electric CEO John Oehler and President Christian Blake alongside the two corporate entities [1].
The False Claims Act, 31 U.S.C. §§ 3729-3733, imposes treble damages and civil penalties on parties that knowingly submit false claims to the federal government. The service-disabled veteran-owned small business program, administered primarily through the Department of Veterans Affairs and the Small Business Administration, restricts certain contract set-asides to firms majority-owned and controlled by veterans with service-connected disabilities. Prosecutors allege that Broadway Electric and Cornerstone Contracting used the veteran-owned designation to win set-aside work they were not eligible to receive, a scheme that diverts contracts from qualifying businesses and inflates costs paid by federal agencies [1].
The inclusion of individual executives, Oehler and Blake, in the settlement reflects the DOJ's sustained practice of pursuing personal liability alongside corporate liability in procurement fraud cases. Individual accountability increases both the deterrent effect and the practical recovery available to the government when a corporate defendant has limited assets. The $21.3 million figure represents a significant recovery in the set-aside fraud space, where settlements commonly range from the low millions to the tens of millions depending on contract volume and duration [1].
The DOJ did not announce parallel criminal charges in connection with this settlement, though the civil resolution does not preclude future criminal referrals if the government determines the evidence meets that threshold. False Claims Act settlements of this type typically include corporate compliance obligations and, in some cases, exclusion from future federal contracting, though the specific terms of any compliance undertakings here were not detailed in the announcement [1]. Whistleblower relators, who may have initiated the case under the Act's qui tam provisions, would be entitled to a share of the recovery, but the DOJ announcement did not identify any relator [1].