Hayward-based technology company settles allegations it submitted false claims

A Hayward-based technology company has agreed to pay $250,000 in penalties to resolve allegations it knowingly submitted false claims for communications equipment used in the BART system, authorities said Monday.

HSQ Technology, a subsidiary of RailWorks Corporation, faced allegations it violated the federal False Claims Act for its submissions of claims related to the Santa Clara Valley Transportation Authority’s Silicon Valley Berryessa Extension Project, U.S. Attorney Ismail J. Ramsey, of California’s Northern District, said in a statement.

That project aims to bring BART’s rail system to San Jose and was partially funded by a federal grant provided by the Federal Transit Administration.

Ramsey, in his statement, said HSQ acknowledged in the settlement that they entered into a subcontract in August 2012 to deliver communications systems for the Berryessa Extension Project and that it purchased and installed network communications equipment. Ramsey said the subcontract required HSQ to obtain the network communications equipment from authorized distributors unless specifically approved by VTA to do otherwise.

Instead, according to Ramsey, HSQ acquired some of the equipment through internet sites without VTA’s authorization.

Ramsey said that HSQ submitted eight claims for payment of network communications equipment between July 2015 and August 2016 but lacked documentation that the equipment came from an authorized distributor. Those claims for payment sought money funded by the federal grant, Ramsey said.

The settlement did not determine any liability, Ramsey said. The claims resolved by the settlement remain allegations only.