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Defense Contract Fraud

This archive displays posts tagged as relevant to fraud in defense and military contracts. You may also be interested in the following pages:

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Catches of the Week: Contractors Abroad Face Liability for Fraud in U.S. Government Contracts

Posted  02/19/21
fleet of navy ships
This week, we double up on the Catch of the Week, and highlight two actions involving foreign contractors doing business with the U.S. Navy.

French Concrete Contractor Pays $14.5 Million to Resolve Claims of Delivering Substandard Concrete for U.S. Navy Bases in Africa

In the first case, Colas Djibouti, a subsidiary of French contractor Colas, agreed to pay $12.5m to the U.S. government to settle criminal charges,...

February 17, 2021

French contractor COLAS Djibouti SARL will pay a total of $14.5 million to resolve claims that it supplied substandard concrete under a contract with the U.S. Navy for construction of Navy airfields in the Republic of Djibouti.  Colas Djibouti was required to certify that concrete supplied met contractual specifications for composition and characteristics, but made fraudulent misrepresentations and created fictitious testing results regarding the concrete’s composition and characteristics.  Defendant entered into a deferred prosecution agreement on criminal claims, paying $12.5 million ($10 million in forfeiture and restitution, and $2.5 million as a criminal penalty).  Defendant also entered into a civil settlement for  $3.9 million, receiving a credit of $1.96 million for its payment under the DPA.  DOJ; USAO SD Cal

DOJ Reports Decline in Total Fraud Recoveries in 2020, but Whistleblower Efforts and Rewards Continue

Posted  01/14/21
Department of Justice building entrance
In its annual report of recoveries in fraud and False Claims Act cases, the Department of Justice reported total recoveries of $2.2 billion for the fiscal year ending September 2020.  These recoveries represent the lowest reported DOJ recoveries since 2008. While it is the decline in recoveries that stands out, the 2020 DOJ fraud statistics do share some things in common with prior years.  First, whistleblowers...

January 12, 2020

Boeing-owned drone maker Insitu Inc. has agreed to pay $25 million to resolve a whistleblower-brought suit alleging violations of the False Claims Act.  According to D.R. O’Hara, a former executive at Insitu, the company knowingly submitted cost and pricing data for new parts, but used recycled parts to build drones being supplied to the U.S. Navy and U.S. Special Operations Command on seven contracts.  The alleged misconduct ran from 2009 to 2017.  For exposing the fraudulent scheme, Mr. O’Hara will receive $4.6 million of the settlement proceeds.  USAO WDWA

January 11, 2021

Defense contractor Raytheon Technologies Corporation and its subsidiary, Hamilton Sundstrand Corporation, have agreed to pay over $515,000 to settle allegations of submitting false claims for payment.  Between 2006 and 2015, Raytheon and Hamilton improperly certified that goods it sold either directly to the government or to suppliers selling to the government were of domestic origin, when in fact they were manufactured in Romania.  The false certifications violated the contracts’ domestic-preference requirements, the Buy American Act of 1933, and the False Claims Act.  USAO CT

December 21, 2020

Government contractor Schneider Electric Buildings Americas Inc. will pay a total of $11 million to resolve criminal and civil claims that it overcharged the government on eight separate energy savings performance contracts under which the company was to install energy upgrades including solar panels, LED lighting, and insulation, in federal buildings.  The company admitted to wrongdoing including the disguising of unauthorized design costs by charging them to unrelated contract components and the receipt of kickbacks from subcontractors on the ESPCs. $9.3 million of the settlement resolves civil liability under the False Claims Act and Anti-Kickback Act; $1.7 million is denominated as criminal forfeiture.  DOJ

Whistleblowing As a Civic Duty: Now Is the Time To Act

Posted  10/23/20
By Edward Baker
Whistleblower in Text
With voting in the 2020 election underway and the presidential debates behind us, now is a good time to reflect on the importance of civic duties to the preservation of American democracy.  Voting, paying taxes, serving on a jury, and registering with selective service are all examples of such duties—responsibilities which, if ignored or unfulfilled by enough individuals, will cause the institutional fabric holding...

This Week in Whistleblower History: The Hall Carbine Affair and Defense Procurement Fraud

Posted  10/2/20
This week marks the first public unveiling of a fascinating—and still disputed—event in whistleblower history called the “Hall Carbine Affair.”  Arising out of the investigative activities of a U.S. House Special Committee at the start of the Civil War into rampant defense procurement fraud, the scandal involved the government sale and then repurchase of obsolete rifles for the Union Army at grossly inflated...

September 15, 2020

In a resolution valued at $51.7 million, defense contracting firm QuantaDyn Corporation agreed to plead guilty and enter into a civil settlement to resolve claims and charges arising from its scheme to bribe an Air Force contracting official to provide procurement-sensitive information and steer government contracts for training simulators to the company.  The government contented that QuantaDyn’s bribery scheme caused a prime contractor to submit false invoices to the United States.  QuantaDyn will pay $37.8 million in restitution, a criminal penalty of $6.3 million, and forfeit $7.1 million; the company CEO and majority owner, William T. Dunn, Jr., will pay $500,000.  DOJ

August 20, 2020

Defense contractor Islands Mechanical Contractor, Inc. (IMC) has paid the United States $1.1 million to settle claims of improperly submitting equitable adjustment claims relating to a delayed facility construction project at Guantanamo Bay.  An investigation by the Defense Contract Audit Agency had found that IMC’s claims for equipment and worker standby costs were based on misrepresented information, as both the equipment and workers listed on the claims had been reallocated to other projects and were no longer on standby.  USAO MDFL
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