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Contract Non-Compliance

This archive displays posts tagged as relevant to fraud arising from or resulting in non-compliance with government contracts. You may also be interested in the following pages:

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Fourth Circuit Embraces Expansive View of False Claims Act Fraud and Materiality In Triple Canopy Ruling

Posted  01/15/15
By Gordon Schnell Another circuit court decision giving a properly expansive view of what it takes to make out a fraud claim under the False Claims Act.  This one from the Fourth Circuit in United States v. Triple Canopy, Inc..  Before the Court were two key questions.  One, whether a defense contractor's claim for payment still could be false when there was nothing false on the face of the invoice.  And two,...

Fifth Circuit Finds Government Knowledge Defense Not Appropriate On Motion To Dismiss

Posted  01/8/15
By the C|C Whistleblower Lawyer Team Under the so-called "government knowledge" defense, the government's awareness of a fraud can defeat False Claims Act liability on the ground the defendant did not "knowingly" defraud the government since the government acted with full information.  It is not a statutory defense but merely a way for a defendant to rebut the intent (or scienter) element of a False Claims Act...

Whistleblower Goes it Alone and Wins Big in Guardrail Case

Posted  10/23/14
By the C|C Whistleblower Lawyer Team A federal jury in Texas this past Monday came down hard against highway guardrail maker Trinity Industries in a whistleblower action brought by one of Trinity's competitors, a guardrail installer named Joshua Harman.  He claimed Trinity cut corners on its guardrails, did not come clean with the government, and ultimately put millions of motorists at serious risk.  The jury...

JM Eagle — Government Contracting Fraud/Noncompliance with Industry Standards ($22.5 million).

Two of our whistleblower attorneys led the representation of whistleblower John Hendrix, a former engineer at JM Eagle, as well as dozens of public agencies, in a two-month jury trial in Los Angeles against JM Eagle, the largest PVC pipe maker in the world. The jury returned a 50-page verdict finding that, over a ten-year period, JM Eagle had falsely represented its compliance with industry standards related to long term strength and durability of its PVC pipe. The pipe is buried deep underground in hundreds of municipalities around the nation. The damages phase of the case has not yet been held. However, a co-defendant in the case, Formosa Plastics, paid $22.5 million to settle its own potential liability, and Mr. Hendrix received a whistleblower reward from that settlement. See NY Times and Corporate Crime Reporter for more.

ATK — Government Contracting Fraud/Defective Product ($37 million).

One of our whistleblower attorneys led the representation of Kendall Dye, an engineer with what was formerly ATK Thiokol and is now ATK Launch Systems, who brought a qui tam action under the False Claims Act against ATK for selling defective flares to the United States military. According to the complaint, company testing revealed the flares could accidentally ignite if dropped from a height of as little as 11 inches. The flares burn at thousands of degrees, and are capable of burning through the hull of a ship, creating a significant safety risk. The government joined Mr. Dye’s case, and ATK ultimately settled for $37 million, with Mr. Dye receiving a whistleblower reward of $9 million. See NY Times for more.

Northrop Grumman — Government Contracting Fraud/Failure to Test ($12.5 million).

One of our whistleblower attorneys led the representation of Allen Davis, a former quality assurance manager at Northrop’s Navigation Systems Division facility in Salt Lake City, who brought a qui tam action under the False Claims Act, alleging the defense contractor failed to test properly certain commercial parts it supplied for navigation systems in warplanes, submarines and space equipment. Northrop ultimately settled the case for $12.5 million with Mr. Davis receiving a portion of that amount as a whistleblower award. See Reuters for more.

Tyco — Government Contracting Fraud/Noncompliance with Industry Standards ($60 million).

One of our whistleblower attorneys led the representation of Nora Armenta and dozens of California municipalities in a qui tam action under the False Claims Act against Tyco International, Mueller Co., and the James Jones Company, alleging they sold waterworks parts to municipal water systems that were made with 40% more lead than allowed by industry standards. According to her complaint, Ms. Armenta repeatedly warned her superiors that the parts were for drinking water, but was ignored. The defendants settled the case, but only after 13 years of litigation, including three successful appeals that reversed unfavorable trial rulings. The defrauded municipalities received $60 million, and Ms. Armenta received a whistleblower reward of $15 million.

Northrop Grumman/TRW — Government Contracting Fraud/Defective Products ($325 million).

One of our whistleblower attorneys led the representation of Robert Ferro, who was a scientist for a TRW Inc. subcontractor, in a qui tam action under the False Claims Act against Northrop Grumman (which has since acquired TRW). Mr. Ferro alleged TRW sold classified “spy” satellites to the government with defective components that caused the satellites to fail while on orbit. According to the complaint, when Mr. Ferro brought the defect to the attention of TRW engineers, he was threatened and directed not to reveal the information to anyone in the government. Northrop ultimately settled the case for $325 million, the largest ever whistleblower settlement by a defense contractor. Mr. Ferro received a whistleblower award of $48.7 million. See NY Times, Wall Street Journal, Washington Post and LA Times for more.
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