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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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April 8, 2020

The last defendant in a conspiracy to rig bids and fix prices for supply fuel to U.S. military bases in South Korea has agreed to pay $2 million to resolve civil claims under Section 4A of the Clayton Act and the False Claims Act.  The government’s investigation into all defendants, including Jier Shin Korea Co. Ltd. and its president, Sang Joo Lee, were instigated by a whistleblower and resulted in a previous settlement of over $205 million.  As part of the settlement, Jier Shin and Lee have agreed to cooperate in the ongoing investigation and abide by an antitrust compliance program.  DOJ

January 23, 2020

DynCorp International has agreed to pay $1.5 million to settle allegations that two former company officials, Wesley Aaron Struble and Jose Rivera, violated the Anti-Kickback Act and False Claims Act in connection with a Department of State property lease.  The two co-conspirators allegedly solicited and received $390,000 in cash kickbacks from an Iraqi subcontractor, the Al-Qarat Company, in exchange for influencing Dyncorp's lease of the property in Baghdad.  USAO EDVA

Top Ten Non-Healthcare False Claims Act Recoveries of 2019

Posted  01/10/20
False Claims Act
This year, federal and state governments recovered hundreds of millions of dollars thanks to whistleblowers who came forward to report fraud under the federal False Claims Act and state False Claims Acts.  Whistleblowers reported a wide-range of misconduct involving government contracts, including fraud by defense contractors, airlines, and even a major research university.  Defendants’ deception ran the gamut...

Unitrans International Inc., Anham FZCO, et al. — Government Contract Fraud ($45 million)

Our attorneys represented Rory Maxwell, John Bush, and Supreme Foodservice GmbH in a qui tam action under the False Claims Act against Unitrans International Inc., a privately held Virginia defense contracting company, and Anham FZCO, an associated Dubai Free Zone company, for making false certifications of compliance with the U.S. sanctions regime against Iran to induce the U.S. Defense Logistics Agency and the U.S. Army to award Anham wartime contracts to provide food and transportation to U.S. troops.  Our whistleblower clients also alleged Anham knowingly and falsely represented construction progress on its Bagram warehouse in related bid proposals to the government.  In December 2019, Unitrans agreed to pay $45 million to resolve criminal and civil allegations related to this alleged misconduct, which includes $27 million to resolve our whistleblower clients’ False Claims Act allegations.  Read more about the case at the Department of Justice website here and in The Washington Post here.

December 12, 2019

For selling defective, Chinese-made products to the U.S. Department of Defense on fraudulently obtained contracts, Timothy Kelly, a California business manager for Emerson Company, has been sentenced to 2.5 years in prison.  Together with company owner Daniel Norton, who was sentenced to 8 years in prison, the two have also been ordered to pay $2.38 million in restitution, forfeit $333,000 in a bank account, and forfeit a $725,000 house in Hawaii.  USAO SDOH

December 4, 2019

A subcontractor providing logistical services on a U.S. Defense Logistics Agency (DLA) contract with Anham FZCO has agreed to pay $45 million to resolve criminal obstruction charges and civil False Claims Act allegations.  Anham and Unitrans International Inc. had been accused of failing to comply with contract provisions prohibiting materials used to support U.S. troops in Afghanistan from passing through Iran.  Based on a qui tam suit by whistleblowers Rory Maxwell, John Bush, and Supreme Foodservice GmbH, the two contractors also fraudulently induced contracts with DLA and the Army by falsely certifying compliance with the Iran sanctions and falsely representing the status of another project.  DOJ

December 3, 2019

Weapons manufacturer Capco, LLC has agreed to pay over $1 million to resolve fraud allegations raised by its former quality engineer, James Cole.  According to Cole, from 2016 to 2018, the company knowingly certified that M320 grenade launchers sold to the U.S. Army were manufactured in compliance with contract specifications, when in fact a critical component had been manufactured using the wrong type of steel.  Capco also failed to disclose the issue despite conducting an internal investigation.  For bringing the issue to light, Cole will receive approximately $235,000 of the recovery. USAO CO

November 18, 2019

Daniel Norton, the owner of former DOD contractor Emerson Company, has been sentenced to 8 years in prison following his guilty plea on charges that he fraudulently obtained government contracts and obstructed justice.  According to the evidence at trial, Emerson Company had been debarred in 2011, but Norton used front companies to fraudulently secure purchase orders for parts to be supplied to the military.  In violation of contract Buy-American requirements, Norton filled the purchase orders by supplying non-conforming products manufactured in China, even where the contract called for a specific part from an American manufacturer.  In addition to his prison sentence, Norton was ordered to pay $2.4 million in restitution, and forfeit property valued at over $1 million.  USAO SD OH

November 18, 2019

Computer hardware supplier Eagle Alliance will pay $110,000 to resolve a case brought by a whistleblower alleging that the company improperly double-billed the government for computer equipment, and billed for used equipment as if it were new.  Jeffrey Brenner, a former employee of Eagle Alliance, will receive $18,700 as a whistleblower reward.  USAO MD
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