Government Contractor Fraud Lawyer

Practice Areas Whistleblower Law Government Contractor Fraud Lawyer

How to Report Defense Contractor Fraud under the False Claims Act

If you’re aware of defense contractor fraud in which the company engages in any scheme to defraud or overbill the federal government, like when they: falsify billing, falsify credentials, fail to have truthful negotiations, use inferior products, falsify countries of origin or engage in kickbacks you may have rights under the False Claims Act that could lead to a defense contractor whistleblower award. Due to the magnitude of defense contracts with the federal government, cases involving defense contractors tend to have stratospheric recoveries, sometimes ending in tens of millions of dollars in whistleblower awards for the insider who has the integrity to report the matter the right way through a False Claims Act attorney.

To navigate the complexities of defense contractor fraud cases and secure the rights and protections whistleblowers are entitled to, whistleblowers should look to hire a defense contractor fraud whistleblower law firm. Accomplished defense contractor fraud whistleblower lawyers can offer invaluable guidance and support, including navigating the steps of filing a whistleblower claim and ensuring robust protection against retaliation.

What Is Defense Contractor Fraud?

Defense contractor fraud refers to illegal or unethical practices by companies or individuals involved in providing goods and services to the national defense and military sectors. This fraud can take various forms, such as overbilling the government for services not rendered or goods not supplied, substituting specified materials with inferior alternatives, and manipulating contract prices through false negotiations.

Common types of defense contractor fraud include:

• Defense Contractor Overbilling: Charging the government for more hours worked or materials used than was the case, leading to inflated costs.
• Defense Contractor Charging for Non-Performed Services: Billing for services never rendered or goods never delivered.
• Defense Contractor Misrepresenting Costs or Prices: Falsifying cost or pricing information during contract negotiations to secure a higher contract price violates regulations like the Truth in Negotiations Act.
• Defense Contractor Falsifying Test Results: Providing inaccurate test results to suggest compliance with contract specifications or safety standards when the products do not actually meet those standards.
• Defense Contractor Defective Pricing: Intentionally underestimating costs in proposals for government contracts to be awarded the contract, with the intention of increasing costs later.
• Defense Contractor Falsifying Country of Origin: Some countries, such as China, are on the prohibited list from certain buy American acts, but sometimes contractors conceal the origin to reduce their cost significantly. In turn, they commit a blatant act contrary to congressional intent and contract fraud.
• Defense Contractor Kickbacks: Bribery of foreign officials may implicate the FCPA as well as the FCA—that is, it may be a violation of the Foreign Corrupt Practices Act and the False Claims Act. Bribery, whether foreign or domestic, also implicates the Anti-Kickback Statute (AKS), and in certain cases, if people are injured as a result of the bribery of a hostile entity, the company may be exposed to liability under anti-terrorism statutes.

Examples of Defense Contractor Fraud

Due to the large number of national defense orders, defense contractor fraud is notable for the sizable amounts that bad actors are accused of defrauding the government. Some notable cases include:

United Technologies Corporation (UTC): UTC and its subsidiaries agreed to pay more than $75 million to resolve allegations of making false statements to the U.S. government about the prices of spare parts and engines sold to the U.S. Air Force. This case involved overcharging for items and not disclosing accurate cost or pricing information during negotiations.

KBR, Inc.: KBR, Inc., a major engineering and construction company, agreed to pay the U.S. government $579 million to settle charges of receiving kickbacks and inflating prices for military bases in Iraq. This case is one of the largest settlements related to fraud in wartime contracts, highlighting issues of overbilling and corruption.

Lockheed Martin: Lockheed Martin settled for $37.9 million over allegations of submitting false lease cost claims to the U.S. Department of Defense for using Titan IV rocket launch facilities. This case involved false claims and overbilling for services.

Contractor Fraud and the False Claims Act

The False Claims Act plays a pivotal role in combating defense contractor fraud by incentivizing private individuals, known as whistleblowers or “relators,” to come forward to provide the government with leads. The False Claims Act allows whistleblowers to file lawsuits on behalf of the government against entities that have defrauded government programs. These actions, known as qui tam lawsuits, are a critical component of the False Claims Act, empowering individuals with insider knowledge to come forward without fear of retaliation.

In recognition of their role in uncovering fraud, whistleblowers are entitled to a percentage of the recovered damages, typically ranging from 15% to 30%, which can amount to substantial sums given the scale of government contracts. When a contractor knowingly submits false claims or makes false records or statements to get a fraudulent claim paid by the government, they are in violation of the False Claims Act. The origin of the False Claims Act is from the Lincoln Law, in which contractors defrauded the federal government for wartime items at the time of the Civil War. Thus, the statute was specifically created to combat defense contractor fraud.

Procurement Fraud

Procurement Fraud is a broad umbrella term that encompasses defense contractor fraud when used to refer to any illegal or unethical practices in the procurement process in any sector. Procurement refers to the process by which organizations acquire goods, services, or works from external sources. It involves a range of activities from identifying needs, sourcing and selecting suppliers, negotiating terms and prices, to the purchasing and delivery of goods and services. Procurement fraud can occur at any stage of the procurement lifecycle, from the initial needs assessment and tendering process to the execution and evaluation of contracts.

Common types of procurement fraud include:

• Bid Rigging: Suppliers collude to raise prices or allocate markets among themselves.
• Kickbacks: Supplier offers a bribe to influence the awarding of a contract.
• Conflict of Interest: Individuals involved in the procurement process have undisclosed personal or financial interests in the outcome.
• False Invoicing: False amounts for goods or services not provided or inflated beyond their delivered value.
• Substitution of Inferior Goods: Delivering products of a lower quality than specified, without disclosure.

Examples of Procurement Fraud

Notable cases of procurement fraud against the government include:

• Boeing: Boeing settled for $54 million over allegations that it placed defective gears in CH-47D Chinook helicopters that could have led to helicopter crashes. This case exemplifies issues with substandard product delivery and failure to meet contract specifications.
• CityTime Project in New York City: The CityTime project, intended to modernize the timekeeping and payroll systems for New York City employees, came to light when its costs ballooned from $63 million to over $600 million due to fraud and kickbacks. Several consultants and subcontractors were charged with misappropriating funds through overbilling and kickbacks.
• S. Army Major John Cockerham: Former U.S. Army contracting officer Maj. John Cockerham was charged with accepting more than $9 million in bribes from contractors supplying goods and services to military forces in Kuwait and Iraq.

How to Report Government Contract Fraud under the False Claims Act

If you have knowledge of government contract fraud or procurement fraud, where a company engages in schemes to defraud or overbill the federal government, you have rights, protections and can potentially receive a whistleblower reward under the False Claims Act. Fraudulent activities may include falsifying billing records, misrepresenting credentials, failing to engage in honest negotiations, using inferior products, misrepresenting the country of origin, or engaging in kickbacks, just to name a few. Correctly reporting such activities can potentially lead to significant whistleblower rewards, reflecting the high stakes and substantial amounts involved in government contracts.

Brown, LLC handles government contractor fraud cases and defense contractor fraud cases, including procurement fraud involving hundreds of millions of dollars. If a 20% whistleblower award under the False Claims Act is applied, tens of millions are available for defense contract insiders who blow the whistle correctly.

Government contractor fraud is a significant concern due to its impact on national security, which can have boundless consequential implications for the security and well-being of our nation and, of course, impact financial integrity. Whistleblowers who step forward with information about such fraud play a crucial role in ensuring that government contracts are utilized ethically and in accordance with the law, and help to hold bad actors accountable and deter future misconduct. Retaining a government contractor fraud lawyer is essential as they help you make the right decisions in what to file, where to file and how to gather evidence. Under the False Claims Act, you need a whistleblower law firm to file a qui tam case.

To ensure your rights are protected, consider working with a law firm experienced in handling government contract fraud cases. A seasoned government contract fraud lawyer can offer essential guidance and support throughout the process, which includes filing a whistleblower claim and maximizing your protection from retaliation, should that be a concern. Firms that are most effective in this space have prior government experience and know how the system works, especially a firm like Brown, LLC, which has multiple former Department of Justice Alumni. This is important when deciding which firm has the best government contractor fraud attorney for your case.

What Is Government Contract Fraud?

Government contract fraud refers to illegal or unethical practices by companies or individuals involved in providing goods and services to federal, state, or local government entities. This type of fraud can take many forms, including:

• Overbilling: Charging the government for more hours or materials than actually provided.
• Charging for Non-Performed Services: Billing for services or goods that were never delivered.
• Misrepresenting Costs or Prices: Falsifying cost or pricing information during contract negotiations. This is sometimes referred to as a TINA violation which stands for Truth In Negotiations Act.
• Falsifying Test Results: Providing inaccurate test results to falsely indicate compliance with contract requirements. This can be willful non-compliance with CGMP or other falsifications.
• Defective Pricing: Underestimating costs in proposals to win a contract, then increasing costs later.
• Falsifying Country of Origin: Concealing the true origin of products to avoid compliance with restrictions, such as those imposed by “Buy American” laws.
• Kickbacks: Engaging in bribery, which may also implicate the Foreign Corrupt Practices Act (FCPA) and the Anti-Kickback Statute (AKS).
• Cross Charging Schemes: Placing the labor costs of non-government work to the government contracts or between government contracts if one allocation runs out and the other has more room to bill.

Choosing a Government Contract Fraud Law Firm

A reputable law firm experienced in government contract fraud will ensure your rights are protected and guide you through the complexities of the whistleblowing process. Experienced government contract fraud lawyers offer comprehensive services, which include filing qui tam lawsuits and addressing any concerns you may have about retaliation. For a confidential consultation regarding potential government contractor fraud or defense contractor fraud, contact the whistleblower law firm of Brown, LLC at (877) 561-0000.