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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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September 28, 2023

The Boeing Company has agreed to pay $8.1 million to resolve allegations of violating the False Claims Act.  Under a Navy contract to manufacture a tiltrotor military aircraft, Boeing allegedly failed to comply with certain manufacturing specifications, submitted false claims, and made false statements.  The claims were brought in a qui tam suit by former Boeing employees, who will receive a relator’s share of $1.5 million as a result of the settlement.  DOJ

September 15, 2023

Navmar Applied Sciences Corp. has agreed to pay $4.4 million to resolve allegations of double billing and improperly shifting costs between contracts, in violation of Federal Acquisition Regulations and the False Claims Act.  While under a series of Navy contracts to manufacture, design, and test emerging intelligence technologies, the company double billed for the same costs on two separate contracts, and improperly shifted costs incurred under some contracts to other contracts.  DOJ

September 12, 2023

J&J Korea Inc. has been ordered to pay nearly $9 million in criminal penalty and restitution after pleading guilty to rigging bids and committing fraud against the U.S. government.  J&J was found to have conspired with others in order to win most of the subcontracts being offered by the U.S. Department of Defense for the maintenance of military hospitals in South Korea.  DOJ

July 21, 2023

In one of the largest procurement fraud settlements in history, defense contractor Booz Allen Hamilton has agreed to pay almost $377.5 million to resolve claims of violating the False Claims Act.  According to former employee Sarah Feinberg—who filed a qui tam suit in 2016, and who will receive a nearly $70 million share of the settlement—Booz Allen improperly billed the government for indirect charges that should instead have been billed to commercial and international contracts.  USAO DC

KBR – Defense Contracting Fraud ($108.75 million)

Constantine Cannon represented whistleblowers Geoffrey Howard and Zella Hemphill Anderson in a False Claims Act case against defense contractor KBR Inc. that resulted in the largest settlement to date involving Iraq War fraud.  KBR agreed to pay the government $108.75 million, with the whistleblowers sharing an award of $31.5 million, representing a whistleblower share of 29% of the total recovered.  The whistleblowers alleged that KBR overcharged the U.S. government in connection with procuring supplies and materials to support U.S. troops stationed in Iraq and Afghanistan during the Iraq War. The relevant contract, pursuant to which the government reimbursed KBR for its costs plus profit, required KBR to make efficient use of taxpayer funds by “cross-leveling” before procuring new material, including by checking to see if KBR already had excess of the needed item available in-theater before buying more.  In their complaint, the relators, both of whom worked for KBR during the Iraq War, alleged that KBR’s failures to “cross-level” resulted in hundreds of millions of dollars in excess materials and overcharges to the government.  Press Release; Whistleblower Insider

After 12 Years of Litigation, Constantine Cannon Settles the Largest Iraq War Fraud Case Ever

Posted  07/6/23
In the largest settlement of a case alleging fraud during the Iraq War, KBR Services has agreed to pay $108.75 million to resolve a whistleblower case brought by two Constantine Cannon clients under the qui tam provisions of the False Claims Act.  The settlement followed 12 years of litigation, during which KBR and its lawyers fought every step of the way. While the size and scope alone make the settlement...

April 21, 2023

Keith Alan Seguin, an Air Force civilian employee, will spend 188 months in prison and pay over $39 million in restitution to the Air Force, Army and General Services Administration, and the IRS, and forfeit over $2.3 million that he received in bribe money for colluding with others to evade competition and steer $100 million in government Air Force projects to them. Seguin was charged with making a false income tax return and for conspiracy to commit wire fraud. USAO WDTX

December 21, 2022

Biotechnology companies iSense, LLC and Specific Diagnostics, Inc., together with their founder Paul Andrew Rhodes, will pay a total of $10.1 million to resolve allegations that they submitted false claims under grants from the DOD and HHS.  The government alleged that the firms improperly billed for costs incurred by another business, billed for compensation in excess of authorized federal limits, backdated services and cost-sharing agreements, and knowingly presented a backdated agreement to the government. USAO NDCal

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

June 14, 2022

Defense contractor Kellogg Brown & Root Services, Inc. and related entities will pay $13.7 million to resolve allegations that the companies submitted false claims under KBR’s Logistics Civil Augmentation Program (LOGCAP) III contract for the delivery of logistics support to U.S. Army forces in Iraq.  In an action originally brought by a whistleblower, the government alleged that KBR employees rigged bids on certain subcontracts in exchange for kickbacks from the subcontractors, and unlawfully passed on the inflated cost of those subcontracts to the government. DOJ
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