Defense Contract Fraud

December 1, 2015

DRS Technical Services, Inc. agreed to pay $1 million to settle charges it violated the False Claims Act by overcharging on three U.S. Army contracts for work in Kuwait, where 15 DRS TSI employees were directed to record more time for labor hours than was actually being worked.  DRS TSI made a voluntary disclosure to the government under the Contractor Business Ethics Compliance Program and Disclosure Rule (also known as the Federal Acquisition Regulations Mandatory Disclosure Rule) after the company discovered the improper conduct through its internal compliance program.  DOJ (EDVA)

November 25, 2015

Defense contractor L-3 Communications Eotech, Inc., its parent company, L-3 Communications Corporation, and Eotech president Paul Mangano, agreed to pay $25.6 million to settle charges they violated the False Claims Act by selling defective holographic weapon sights to the Department of Defense, Department of Homeland Security, and the Federal Bureau of Investigation.  Defendants knew the sights failed to perform as represented in cold temperatures and humid environments, but delayed disclosure of these defects for years. DOJ (SDNY)

November 2, 2015

Massachusetts-based telecom software company NetCracker Technology Corp. agreed to pay $11.4 million, and Virginia-based information technology company Computer Sciences Corp. agreed to pay $1.35 million to settle charges they violated the False Claims Act by using individuals without security clearance on a government defense contract.  The allegations first arose in a whistleblower lawsuit filed by former NetCracker employee John Kingsley under the qui tam provisions of the False Claims Act.  Mr. Kingsley will receive a whistleblower award of $2,358,750 as his share from the government’s recovery in this case. Whistleblower Insider

October 27, 2015

Arizona-based ocean carrier APL Limited, a wholly-owned American subsidiary of Singapore-based Neptune Orient Lines Limited, agreed to pay $9.8 million to resolve allegations it violated the False Claims Act in connection with a Department of Defense contract to provide GPS tracking of shipping containers in Afghanistan.  The government contract required APL to affix a satellite tracking device to each shipping container transported from Karachi, Pakistan to U.S. military bases in Afghanistan.  According to the government, APL billed the DOD for tracking services despite knowing that the tracking devices completely or partially failed to transmit data, or were not affixed to shipping containers.  DOJ

October 15, 2015

Houston-based military contractor Kellogg Brown & Root, Inc. (KBR) was ordered to pay roughly $108,000 for violating the Anti-Kickback Act by accepting gifts and gratuities, including expensive dinners, golf outings and event tickets, from various sub-contractors while KBR was providing logistic services to the United States Army Operations Support Command contract known as LOGCAP III.  LOGCAP III was awarded to KBR for the provision of logistical support to the Army in Iraq and Afghanistan.  FBI

October 14, 2015

Chicago-based aerospace and defense industry giant Boeing Company 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.  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.  Whistleblower Insider

September 29, 2015

One current and three former US Army soldiers were sentenced for their involvement in a bribery scheme in Afghanistan that resulted in the theft of fuel valued at more than $10 million.  Jeffery B. Edmondson was the senior enlisted member of the unit who supervised all his co-conspirators and was sentenced to eight years in prison.  Christopher Ciampa was sentenced to 10 years in prison.  Enmanual Lugo was sentenced to four years in prison.  And Geoffrey Montague was a senior enlisted member of the unit who reported to Edmondson and was sentenced to five years in prison.  In connection with their guilty pleas, the defendants admitted to submitting fake Transportation Movement Requests (TMRs) for thousands of gallons of fuel that were neither necessary nor used by military units.  The defendants admitted that, in return for cash bribe payments, they awarded all the TMRs to the same Afghan trucking company, which used the fake TMRs to download fuel from depots on Kandahar Air Field and then sold the fuel on the black market.  DOJ

September 28, 2015

L-3 Communications Corporation and its affiliated entities Vertex Aerospace LLC and L-3 Communications Integrated Systems LP agreed to pay $4.63 million to resolve allegations they violated the False Claims Act by inflating labor hours for time spent by independent contractors at the military’s Continental US Replacement Centers (CRCs) in Fort Benning, Georgia and Fort Bliss, Texas.  According to the government, L-3 knowingly overcharged the government for time their independent contractors spent at the CRCs by billing for each individual not based on the actual time that individual spent at the CRC, but based instead on the earliest arrival or latest departure time of any other individual who also processed through the center that same day.  The allegations first arose in a whistleblower lawsuit filed by former L-3 independent contractor Robert A. Martin under the qui tam provisions of the False Claims Act.  Mr. Martin will receive a whistleblower award of $798,675.  Whistleblower Insider

September 11, 2015

PAE Government Services Inc. and RM Asia (HK) Limited agreed to pay $1.45 million to resolve allegations they engaged in a bid-rigging scheme that resulted in false claims for payment under a US Army contract for services in Afghanistan.  In 2007, the Army awarded PAE a contract to provide vehicle maintenance capabilities and training services for the Afghanistan National Army at multiple sites across Afghanistan.  PAE partnered with RM Asia to supply and warehouse vehicle parts.  According to the government, former managers of PAE and RM Asia funneled subcontracts paid for by the government to companies owned by the former managers and their relatives by using confidential bid information to ensure that their companies would beat out other, honest competitors.  DOJ

July 10, 2015

Army National Guard Sergeant First Class Jason Rappoccio was sentenced to 42 months in prison and to forfeit $31,328 for accepting a $30,000 bribe in exchange for steering a $3.6 million contract to Timothy Bebus, a retired sergeant major of the Minnesota Army National Guard, and his consulting company Mil-Team Consulting.  DOJ