Government Contract Cases


Boeing Will Pay $25 Million to Resolve Allegations that It Defrauded The DoD in a Contract to Provide Drones, Whistleblower Awarded $4.6 Million

Boeing Will Pay $25 Million to Resolve Allegations that It Defrauded The DoD in a Contract to Provide Drones, Whistleblower Awarded $4.6 Million

Boeing has agreed to pay $25 million to settle a procurement fraud lawsuit filed by a former employee.

The aircraft company’s subsidiary, Insitu, is a manufacturer of surveillance drones for the Department of Defense. According to allegations raised in the whistleblower lawsuit, the company systematically charged the government for new parts when it planned to use recycled parts to manufacture drones for the U.S. Special Operations Command and the Navy.

The fraud lawsuit against Boeing was filed by a man who dedicated nearly 40 years of his life to the company. For his role in the investigation, the insider, D R O’Hara, will receive a $4.6 million whistleblower award.

The DOJ said in a statement that between 2009 and 2017, the defendant “knowingly submitted materially false cost and pricing data” to the government, inflating prices and overbilling the DoD for Insitu surveillance drones....


Bechtel and AECOM Will Pay $58 Million Over Improper Billings for Work Performed at Aging Nuclear Plant, Whistleblowers Share $13.7 Million Award

Bechtel Corp. and AECOM Energy & Construction Inc. have agreed to pay $58 million to resolve allegations that they billed the government for work that was never performed under a nuclear weapons plant cleanup contract.

Bechtel and AECOM were hired by the federal government to provide cleanup services at Hanford Nuclear Reservation in Washington. Dating back to the times of the Manhattan Project, Hanford is the most polluted nuclear site in the country.

The contractors spent several years trying to build a nuclear waste treatment plant. The construction project was no easy task, considering Hanford was once the top plutonium-producing plant in America. But it would seem that corporate greed got in the way of the plant's completion. Prosecutors found evidence that, over the years, the defendants billed the federal government for thousands of hours of work that was never performed.

According to Assistant U.S. Attorney Joseph Harrington, “It is stunning that, for nearly a decade, Bechtel and AECOM chose to line their corporate pockets by diverting important taxpayer funds from this critically essential effort.”...


Multinational Manufacturer Must Pay $22 Million to Settle False Claims Act Allegations Related to Customs Fraud

In September, the U.S. Department of Justice announced that a German multinational corporation, Linde GmbH, and its U.S. subsidiary Linde Engineering North America LLC (LENA), had agreed to pay more than $22.2 million to resolve allegations the company had evaded import tariffs by knowingly making false statements on customs declarations.

A whistleblower, identified only as Ms. Johnson, had come forward with information about the scheme and had filed a qui tam lawsuit in the U.S. Court for the Eastern District of Pennsylvania. For her information and subsequent assistance in the DOJ investigation, Ms. Johnson will receive about $3.7 million.

A calculated scheme to evade customs duties

Linde GmbH is a multinational corporation headquartered in Germany and a self-described leader in global industrial gases and engineering. Its 2019 revenues topped $28 billion. Linde claims a mission to “make our world more productive every day.” Among its many operations, Linde imports materials into the United States for use in the construction of natural gas and chemical manufacturing plants. ...


Scripps Research Institute Forced to Pay $10 Million For Misusing Funds from NIH Research Grants

On September 11, The U.S. Department of Justice announced an agreement for The Scripps Research Institute to pay $10 million to resolved allegations that it misused funds the National Institutes for Health had provided for medical research.

Instead of devoting their time entirely to the studies their grants were funding, researchers spent time “developing, preparing, and writing new grant applications, teaching, and engaging in other administrative activities.” A former tenured professor at TSRI, Dr. Thomas Burris acted as a whistleblower in the case and will receive a $1.75 million reward.

A high-pressure environment focused on generating revenue

The Scripps Research Institute is a non-profit biomedical research center with campuses in Jupiter, Florida and La Jolla, California. The highly regarded institute receives millions of dollars in grants from NIH every year. However, the activity within its walls was not consistent with its public image....


Industries for the Blind Will Pay $1.9 Million to Resolve Allegations that It Misrepresented Products as Blind-Made

Wisconsin-headquartered Industries for the Blind has agreed to pay $1.9 million to settle claims that they defrauded the U.S. by passing off China-made products as manufactured by the blind to secure lucrative government contracts.

The federal government hired Industries for the Blind, Inc. (IBI) to manufacture a wide array of products to incentivize the creation of jobs for disabled Americans. But instead of creating those much needed opportunities, the company allegedly bought the goods from China and employed sighted workers, pocketing hundreds of millions of dollars in the process.

With an unemployment rate of approximately 60 percent, one thing blind Americans don’t need is to have employment opportunities taken away, and yet, that is exactly what IBI did, a company insider claims....


Whistleblower Lawsuits Target Military Contractors Who Funded The Taliban and Other Terrorists Overseas

Whistleblower Lawsuits Target Military Contractors Who Funded The Taliban and Other Terrorists Overseas

In 2016, a New Yorker reporter noted that contractors outnumbered U.S. troops three to one in Afghanistan. Part of the reason for this was that moving around on the ground was so dangerous in Afghanistan that our government basically paid local people to risk their lives, for example, by driving trucks and transporting materials for the U.S. military.

“The jobs were dangerous—more contractors had been killed so far that year than U.S. soldiers—but the payoff was substantial,” The New Yorker stated. “Between 2007 and 2014, the U.S. spent eighty-nine billion dollars on contracting in Afghanistan.”

But in an impoverished war zone, U.S. military contracts have inevitably led to large-scale corruption, and as several lawsuits now allege, the result has often been that our country has indirectly funded its own enemies.

Trucking contractors in Afghanistan, for example, were described in a House Committee report as fueling “a vast protection racket run by a shadowy network of warlords, strongmen, commanders, corrupt Afghan officials, and perhaps others,” adding that “protection payments for safe passage [were] a significant potential source of funding for the Taliban.” ...


Northrop Grumman Systems Corp Will Pay $31.65 Million to Settle Defense Contract Fraud Allegations

Northrop Grumman Systems Corp Will Pay $31.65 Million to Settle Defense Contract Fraud Allegations

Northrop Grumman, a defense contractor, has agreed to pay $27.45 million to settle claims of fraudulent billing.

An investigation led by the Air Force Office of Special Investigations (“AFOSI”), the Defense Criminal Investigative Service (“DCIS”), and the FBI uncovered an international scheme to defraud the U.S. Air Force. The agencies found out that employees at Northrop Grumman Systems Corporation (“NGSC”) illegally profited by inflating their work hours on bills for two contracts with the armed forces.

According to the DOJ, the company billed the Air Force for working hours claimed by employees assigned to the Middle East who had not actually worked those hours. From January 2011 to October 2013, the NGSC deliberately mischarged the Air Force for 12 to 13.5 hour work days when, in fact, the workers were not working overtime, but engaging in activities such as sports and partying (among themselves and with their families) and enjoying their five-star accommodations.

By overstating the number of hours worked, employees personally profited, defrauding American taxpayers by roughly $5 million....


Defense Contractor 3M Settles Defective Earplug Lawsuit at $9.1 Million, $1.9 Mill to Whistleblower

Defense Contractor 3M Settles Defective Earplug Lawsuit at $9.1 Million, $1.9 Mill to Whistleblower

Earplug manufacturer 3M will pay $9.1 million to resolve allegations that it knowingly sold defective products to the U.S. military. The alleged misconduct was first brought forward in a whistleblower lawsuit initiated by 3M’s competitor Moldex-Metrics in May 2016.

According to the complaint, 3M knew that its Combat Arms Earplugs Version 2 (CAEv2), were not long enough for proper insertion into the ears of users, and it, nevertheless, sold the product to the Defense Logistics Agency.

CAEv2 earplugs have two different positions. They can be used alternatively as traditional earplugs and flipped over for muffling explosion noise, while letting quiet sounds go through them. While 3M’s engineers allegedly knew the earplugs could lose their seal, which would affect performance, the company did not share that information with the government. Tellingly, CAEv2 plugs are now discontinued.

3M earplug malfunction may have caused thousands of U.S. soldiers to suffer tinnitus and related conditions. Thus, the government may not only have endured losses through the purchasing of defective products, but also through the treatment of ailments related to CAEv2 use....


DOJ Set to Crack Down on Wave of Post-Hurricane Fraud

DOJ Set to Crack Down on Wave of Post-Hurricane Fraud

In the wake of hurricanes Harvey, Irma, Jose, and Maria, the Justice Department is bracing itself for a flood of disaster fraud cases.

In order to coordinate efforts to deal with this type of fraud allegations, the Department of Justice has issued a memo to every US Attorney’s Office, offering specific guidelines to enhance their fraud-fighting efforts.

“Fraud inevitably follows disasters,” criminal justice columnist Tom Jackman said in a recent Washington Post article. Post-disaster scams have multiplied after each natural catastrophe in the US. Katrina has been a notable example. In the aftermath of the hurricane that hit New Orleans in 2005, there were 1,400 federal prosecutions for fraud committed in connection with relief efforts.

In fact, the National Center for Disaster Fraud (NCDF) was created in response to the superabundance of Katrina-related fraud allegations. Only a few days after the last of a wave of hurricanes hit several US states, the Center has already received over 400 complaints....


$2 Million Federal Engineers & Constructors Settlement on Whistleblower Exposed Alleged Scam

$2 Million Federal Engineers & Constructors Settlement on Whistleblower Exposed Alleged Scam

Energy Department subcontractor Federal Engineers & Constructors (FE&C) has just reached a $2 million settlement with the Department of Justice, which resolves a whistleblower’s allegations that it created a shell company to secure a contract for work at the Hanford Nuclear Reservation that should have gone to a small or disadvantaged contractor.

FE&C worked under Washington Closure Hanford (WCH), which had received a multibillion-dollar nuclear waste cleanup contract at the Hanford Nuclear Reservation. As per the terms of the contract, WCH was required to secure the services of women-owned, small, or disadvantaged businesses to complete a portion of the tasks involved.

According to allegations, FE&C awarded a $2 million contract to Sage Tec, a company run by Laura Shikashio, the wife of the company’s former vice president....