October 16, 2015

DOJ Catch of the Week — Boeing

By the C|C Whistleblower Lawyer Team

This week’s Department of Justice “Catch of the Week” goes to the Boeing Company.  On Wednesday, the Chicago-based aerospace and defense industry giant agreed to pay $18 million to settle charges it violated the False Claims Act by submitting false claims for labor charges on maintenance contracts with the US Air Force.  See DOJ Press Release.

According to the government, Boeing overcharged the Air Force for the maintenance and repair of C-17 Globemaster aircraft at Boeing’s Long Beach Depot Center in Long Beach, California.  The C-17 Globemaster aircraft, which is both manufactured and maintained by Boeing, is one of the military’s major systems for transporting troops and cargo throughout the world.  The government alleged that Boeing improperly charged for time its mechanics spent on extended breaks and lunch hours.

In announcing the settlement, Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, made it clear the government will not tolerate fraud with government contracts.  “Defense contractors are required to obey the rules when billing for work performed on government contracts.  Today’s settlement demonstrates that the Justice Department will ensure that government contractors meet their obligations and charge the government appropriately.”

According to the LA Times, Boeing said, it “took prompt corrective action immediately after it became aware of the site’s irregular billing practice.”  The Times also reported that Boeing is in the process of closing its Long Beach factory following the Pentagon’s decision several years ago to cease purchasing the planes.

The allegations originated in a whistleblower lawsuit brought by former Boeing employee James Thomas Webb under the qui tam provisions of the False Claims Act.  He will receive a whistleblower award of roughly $3 million from the government’s recovery.

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