New Jersey company and CEO pay $316,779 for defrauding U.S. Postal Service following wire fraud conviction

ALEXANDRIA, Va. - Cornerstone Facility Solutions, LLC (Cornerstone), a maintenance and repair service located in Brick, New Jersey, and its CEO, Paul Galgon III, paid $316,779 to resolve their False Claims Act liability for falsifying invoices and inflating the cost of services provided to the U.S. Postal Service (USPS).

Cornerstone entered into a service agreement to perform repairs on USPS facilities. USPS requires providers like Cornerstone to report whether they self-performed or subcontracted services for the repairs. If the provider subcontracts the work, the provider is allowed to markup the subcontractor's cost by no more than 10 percent.

From July 2016 to July 2021, Cornerstone submitted false invoices to USPS for repair work, in which Cornerstone claimed its employees performed the work, even though the work was actually performed by subcontractors. Galgon directed Cornerstone employees to alter subcontractor invoices to make them appear as though the work was performed by Cornerstone employees, which enabled Cornerstone to build in an improper 30-percent markup on the subcontractor's costs. As a result of the scheme, Cornerstone overcharged USPS $158,380.

The resolution is the result of a coordinated effort between the U.S. Attorney's Office for the Eastern District of Virginia and the USPS Office of Inspector General.

Galgon also pleaded guilty to one count of criminal wire fraud for the conduct covered by the civil settlement and was sentenced to three years of probation and a $5,000 fine.

The civil case was handled by Assistant U.S. Attorney William Hochul III. The criminal case was prosecuted by Assistant U.S. Attorneys Russell L. Carlberg and Kristin S. Starr.

A copy of this press release is located on the website of the U.S. Attorney's Office for the Eastern District of Virginia. The related criminal docket may be found at United States v. Galgon, No. 1:23-cr-188 (E.D. Va.).