U.S. sues B/E Aerospace unit for falsely claiming women-owned status

(Adds details throughout on lawsuit)

By Nate Raymond

NEW YORK, Oct 5 (Reuters) - An aerospace supply chain manager that was acquired by B/E Aerospace Inc in 2012 was sued by the U.S. government on Monday for misrepresenting itself as a woman-owned small business in order to obtain defense contracts.

In a lawsuit filed in Manhattan federal court, the Justice Department said UFC Aerospace LLC and its former president, Douglas Davis, violated the federal False Claims Act by making its claims, in order to earn $48 million as a subcontractor.

Those misrepresentations, the lawsuit said, provided UFC "a competitive advantage in obtaining these lucrative contracts," according to the lawsuit.

The lawsuit was originally filed under seal in 2012 by a purported whistleblower. Manhattan U.S. Attorney Preet Bharara's office formally intervened on Monday.

B/E Aerospace acquired New York-based UFC in 2012 for $400 million. A B/E spokesman did not respond to a request for comment. A lawyer for Davis could not be immediately identified.

Under a federal law passed in 2000 targeting gender representation contracting, a company had to be 51 percent owned by women and be managed and controlled by women in order to constituted a woman-owned small business.

According to the lawsuit, UFC in 2001 began claiming to be women-owned by listing two female members of the Davis family as the majority owners of UFC's stock in their roles as trustees to two trusts and by saying both were company officers.

But according to the lawsuit, those claims were false. While the trusts listed the women as lifetime beneficiaries, documents made clear their role was "limited as best," the lawsuit said.

Those trusts were established by John Davis, UFC's former chief executive who died in 2005, and Douglas Davis, its former president, both of whom exercised control and ownership over the company, the lawsuit said.

While misrepresenting itself as women-owned, UFC earned $30 million from one government contractor and $18 million from another, according to the lawsuit, which seeks triple damages plus penalties under the False Claims Act.

The case is U.S. v. UFC Aerospace LLC, U.S. District Court, Southern District of New York, No. 12-2594.

(Reporting by Nate Raymond in New York; Editing by Jonathan Oatis and Grant McCool)