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:
October 6, 2021
Defense contractor Crane Company has agreed to pay over $4.5 million to resolve allegations of violating the False Claims Act. According to a former Crane employee, Corla Jacobson, the failures occurred between 2011 and 2017 and involved selling the U.S. Navy high performance butterfly valves that did not conform to military specifications. For initiating a successful qui tam action, Jacobson will receive a relator’s share of over $850,000. USAO SDTXSeptember 10, 2021
Defense contractors Southeastern Equipment Co., Inc. and SECO Parts and Equipment Co. have agreed to pay $900,000 to resolve allegations that they knowingly billed for and provided equipment that was not in compliance with the Buy American Act or the rules of the U.S. Army’s Simplified Nonstandard Acquisition Program. The government’s investigation was initiated by a the filing of a whistleblower suit under the False Claims Act. USAO SD GaAugust 18, 2021
Defense contractor Iris Kim, Inc. (“I-Tek”), together with its owner and four employees, were sentenced on criminal charges arising out of a fraudulent scheme to falsely qualify for Department of Defense and other federal government supply contracts set aside for service-disabled veterans, import Chinese-manufactured goods in violation of the terms of these contracts, and falsely relabel these goods as if they were made in the U.S. The U.S. spent over $7 million on fraudulently-imported goods sold by I-Tek. Owner Beyung S. Kim was sentenced to 58 months in prison, and the four employees were sentenced to a combined 93 months in prison. USAO ED VAJuly 20, 2021
Sage Consulting Group, Inc., and its president and owner Robert Pleghardt, agreed to pay $4.8 million to resolve claims that they paid kickbacks to two business, Wete & Company, Inc. and Index Systems, Inc., which were SBA certified as small businesses owned and operated by socially and economically disadvantaged individuals, to permit Sage to represent that those companies would be performing at least 50% of the work as subcontractors on Sage’s contracts with the Department of Defense Education Activity and Defense Human Resources Activity when, in fact, Sage performed 100% of the work. USAO EDVAJuly 6, 2021
Defense contractor AAR Corp. and its subsidiary, AAR Airlift Group Inc., have agreed to pay $11 million to resolve allegations of knowingly failing to maintain U.S. military aircrafts in accordance with U.S. Transportation Command (TRANSCOM) contracts. The alleged False Claims Act violations involved nine helicopters that were deemed not airworthy and not mission capable as a result of the failures. A former Airlift employee who filed the underlying qui tam complaint, Christopher Harvey, will receive over $2 million as part of the settlement. USAO SDILJune 4, 2021
Virginia-based 360 Patriot Enterprises, LLC and its former minority shareholder, Delaware-based 360 Ventures LLC have agreed to pay $1.12 million to resolve allegations that they fraudulently obtained two U.S. Army contracts intended for service-disabled veteran-owned small businesses (SDVOSB). At the time the contracts were awarded (between 2015 to 2017), 360 Patriot was not controlled by a qualified SDVOSB. USAO EDVAMay 27, 2021
Navistar Defense LLC, a manufacturer of military vehicles, will pay $50 million to resolve False Claims Act allegations that it fraudulently induced the U.S. Marine Corps to enter into a contract modification at inflated prices for a suspension system for armored vehicles known as Mine-Resistant Ambush Protected (MRAP) vehicles. During negotiations for the modification, Navistar was asked to provide certain sales information to assess the reasonableness of Navistar’s proposed prices. The U.S. alleged that Navistar provided the government with fraudulent sales invoices to justify the company’s prices, and that the government relied on these invoices during negotiations. The investigation was initiated by a qui tam complaint filed by whistleblower Duquoin Burgess, a former Government Contracts Manager for Navistar, who will receive $11,060,000 from the settlement. DOJApril 29, 2021
California-based Tungsten Heavy Powder, Inc. (THP) has agreed to pay over $5.6 million to resolve a qui tam lawsuit by former employee Gregory Caputo and Global Tungsten & Powders Corporation. In violation of the False Claims Act, THP allegedly falsely certified that certain defense articles procured by the Israeli government and financed by U.S. grant funds were sourced from and manufactured in the United States, when instead they were sourced from China and manufactured in Mexico. For bringing the lawsuit, Caputo will receive a 17% share of the settlement proceeds. USAO SDCAWhistleblower Champion Chuck Grassley Pushes for Further Strengthening of False Claims Act (Again)
Posted 03/26/21
