DECISION AND ORDER INTRODUCTION Plaintiff, the United States of America (“the Government”), files its amended complaint against Defendants alleging violations of the False Claims Act (“FCA”), 31 U.S.C. §3729 et seq., (Counts I, II, III), common law fraud (Count IV), unjust enrichment (Count V), and payment by mistake (Count VI). ECF No. 48. The Government alleges that Defendants knowingly misrepresented that their company, Veteran Enterprises Company, Inc., (“VECO”), qualified as a service-disabled veteran owned small business (“SDVOSB”) in order to obtain and profit from construction contracts that were set aside for SDVOSBs. On January 31, 2018, this Court granted Defendants’ motions to dismiss the Government’s initial complaint but granted leave to amend. ECF No. 39; United States v. Strock, No. 15-CV- 0887-FPG, 2018 U.S. Dist. LEXIS 15928, at *1 (W.D.N.Y. Jan. 31, 2018). On October 29, 2018, the Government filed an amended complaint. ECF No. 48. On February 22, 2019, Defendants moved to dismiss the amended complaint, and those motions are now before the Court. ECF Nos. 51, 52, 53, 54. For the reasons stated below, Defendants motions to dismiss are GRANTED. BACKGROUND I. The Establishment of VECO The Government alleges that, before establishing VECO, Defendant Lee Strock owned a construction company — Defendant Strock Contracting, Inc. — that participated in and received millions of dollars in contracts from a Small Business Administration (“SBA”) 8(a) program for companies owned by economically and socially disadvantaged individuals. ECF No. 48 28. But once Strock Contracting “graduated” from this 8(a) program, Strock could no longer use it to obtain federal contracts and began looking for other contracting opportunities. Id. 29. He found such an opportunity in SDVOSB programs established by the Small Business Act, the Veterans Benefits Act, and other federal laws which call for certain contracts to be set aside for SDVOSBs only. Id.
16-19; see generally PDS Consultants, Inc. v. United States, 907 F.3d 1345, 1349 (Fed. Cir. 2018) (describing federal laws enacting SDVOSB programs). To qualify as an SDVOSB, a business must, among other things, be at least 51 percent owned by one or more service-disabled veteran(s) who must control the business’s day-to-day operations and make strategic policy and long-term decisions for the company. Id. 18, 26. Lee Strock decided to recruit a service-disabled veteran to a head a company that he could use to obtain SDVOSB contracts, since Strock himself was not a service-disabled veteran. Id. 30. To that end, in or around 2006, Strock met with Terry Anderson, whom he knew was a service-disabled veteran, to discuss the formation of an SDVOSB. Id. 31. As a result, VECO was formed with Anderson appointed as a “figurehead” President and 51 percent owner, Strock as Vice President and 30 percent owner, and Defendant Kenneth Carter as Secretary and 19 percent owner. Id. 32. Defendant Cynthia Golde, who, along with Carter also worked for Strock Contracting, was employed as VECO’s office manager. Id.
