Government Procurement Fraud

March 15, 2018

Japanese-based Toyobo Co. Ltd. and its American subsidiary Toyobo U.S.A. Inc. agreed to pay $66 million to resolve claims they violated the False Claims Act for selling defective Zylon fiber used in bullet proof vests that the United States purchased for federal, state, local, and tribal law enforcement agencies. According to the government, Toyobo knew that Zylon degraded quickly in normal heat and humidity, and that this degradation rendered bullet proof vests containing Zylon unfit for use. But Toyobo nonetheless actively marketed Zylon fiber for bullet proof vests, published misleading degradation data that understated the degradation problem. The settlement is part of a larger investigation of the body armor industry’s use of Zylon in which the government previously recovered more than $66 million from 16 entities involved in the manufacture, distribution or sale of Zylon vests. The allegations surrounding this settlement originated under the whistleblower provisions of the False Claims Act by law enforcement officer Dr. Aaron Westrick, who is now a Criminal Justice professor at Lake Superior University. He will receive a whistleblower award of $5,775,000 from the proceeds of the government's recovery. DOJ

March 12, 2018

Virginia-based trucking company Beam Bros. Trucking Inc. and its principals Gerald and Garland Beam agreed to pay roughly $1 million to resolve allegations they violated the False Claims Act through the company's overcharging the U.S. Postal Service on contracts to transport mail. According to the government, Beam Bros. misused government Voyager Cards, provided by USPS to purchase fuel, to purchase fuel on contracts that did not allow for their use, resulting in inflated charges. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by former Beam Bros. employee Bobby Blizzard. He will receive a yet-to-be-determined whistleblower award from the proceeds of the government's recovery. DOJ

March 9, 2018

San Diego communications company TrellisWare Technologies, Inc. agreed to pay roughly $12.2 million to settle claims it violated the False Claims Act by entering into multiple Small Business Innovation and Research (SBIR) contracts with government defense agencies for which it was ineligible. DOJ (SDCA)

February 6, 2018

Maryland-based Integral Consulting Services, Inc., which provides IT solutions to federal agencies and commercial organizations, agreed to pay roughly $500,000 to settle claims it violated the False Claims Act by inflating certain indirect cost rates in connection with work performed on a Department of the Army contract. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act. The whistleblower will receive a whistleblower award of roughly $92,000 from the proceeds of the government’s recovery. DOJ (MD)