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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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August 2, 2022

VE Source LLC, Sherman Barton, Christopher Neary, and Vertical Source, LLC will collectively pay $7.975 million for violating the False Claims Act by fraudulently procuring government contracts designated for companies owned and controlled by service-disabled veterans. None of the defendants are service-disabled vets, yet they accepted more than $16.5 million from the U.S. Department of Agriculture and the Department of Defense, undercutting the express Congressional purpose of the program. USAO NJ

July 8, 2022

Aerojet Rocketdyne Inc., which provides propulsion and power systems for vehicles belonging to the Department of Defense and NASA, has agreed to pay $9 million to resolve a whistleblower lawsuit.  According to Brian Markus, a former employee, the company misrepresented its compliance with the cybersecurity requirements of contracts with those agencies, in violation of the False Claims Act.  For bringing a successful qui tam case, Markus will receive a relator’s share of $2.61 millionUSAO EDCA

May 25, 2022

Textile manufacturer HEYtex USA will pay $3 million to resolve an action brought by a whistleblower under the False Claims Act alleging that the company knowingly supplied fabrics to the U.S. military that failed to meet contract specifications, and falsely certified that its military-grade fabrics met specifications when, in fact, they had failed to pass required testing.  The whistleblower first reported the falsified test results to company management, but was initially ignored.  USAO WD Va

May 18, 2022

Seven companies in South Korea have agreed to a joint settlement of $3.1 million to resolve allegations that they conspired to suppress and eliminate competition in bidding on 15 contracts for construction and engineering work on U.S. military bases in South Korea awarded by the U.S. Army Corps of Engineers between 2016 and 2019.  The government alleged that as a result of the bid-rigging by the companies, Korea Engineering Consultants Corporation, Yul Lim Construction Co. Ltd., Shin Woo Construction & Industrial Co. Ltd., Seongbo Const. Ind. Co. Ltd., Wooseok Construction Co. Ltd., Yuil Engineering and Construction Co., and Seokwang Development Co. Ltd., the government paid substantially more for services performed under the contracts than it otherwise would have.  DOJ

April 29, 2022

KCF Technologies, Inc., will pay the United States $1,226,436.14 for False Claims Act violations. KCF engaged in procurement fraud by billing labor time spent on commercial contracts improperly to DOD contracts it had with the Department of the Navy and the Department of the Army between 2016 and 2019. MDPA

March 17, 2022

Reveal Global Consulting, LLC has agreed to pay $820,000 to resolve allegations of improperly billing the Defense Intelligence Agency.  Per contract terms, Reveal was only supposed to bill for time and materials expended to fulfill contractual obligations; however, the firm allegedly continued to bill the standard amount even for months when fewer than promised employees were devoted to the contract.  Additionally, Reveal allegedly submitted bills with inflated and misstated work by subcontractors, and bills for work by employees who had already left the company.  USAO EDPA

March 14, 2022

Freight carriers YRC Freight Inc., Roadway Express Inc., and Yellow Transportation Inc. will pay $6.85 million to resolve government claims that they knowingly overcharged the Department of Defense on military freight shipments.  Whistleblower James Hannum, a Yellow Transportation employee, filed a qui tam action alleging that the companies had a practice of re-weighing shipments and, when the reweighs showed an increase from the original weight, defendants charged DOD for these higher weights, but when the reweighs showed a decrease from the original weight, defendants allegedly concealed the lower weight and instead charged DOD for the original, inflated weights.  Hannum will receive a whistleblower award of approximately $1.3 millionDOJ

January 12, 2022

Idaho-based Native American Services Corp. (NASCO) and Texas-based Mirador Enterprises, Inc. (Mirador) have agreed to pay $750,000 and $400,000 respectively, for a combined settlement of $1.15 million, to resolve allegations of fraudulently obtaining two construction contracts at Colorado’s Fort Carson Army installation.  According to the DOJ, one contract was set aside for eligible economically and socially disadvantaged small businesses, and the other was set aside for eligible small businesses.  Although Mirador was eligible for both contracts, it allowed its mentor NASCO to take on the primary role in the performance of the contracts; both companies then took steps to conceal the fraud.  USAO CO

January 6, 2022

SoNo International LLC and Ark Capital Equipment LLC have agreed to pay $904,000 to resolve allegations of supplying the Department of Defense with shipping containers that were made in China or made of Chinese steel, in violation of contracts as well as the False Claims Act.  As part of the settlement, the two companies will also submit to enhanced training and reporting requirements pursuant to an administrative agreement with the Defense Logistics Agency.  An unnamed third-party company, which SoNo and Ark hired to change identifying plates on the shipping containers, has separately agreed to train employees on customs rules and regulations.  USAO EDPA

Catch of the Week: Privatized Military Housing Contractor Pays Over $65 Million to Resolve Criminal and False Claims Act Allegations

Posted  12/23/21
Government contractors are held to high standards in the performance of their contracts or services because of the direct impact to government services and taxpayer dollars at stake. Often fraud related to government contractors can negatively impact U.S. servicemembers or public servants who diligently serve our country. This week we focus on the over $65 million judgment and settlement reached between the...
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