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Fraudulent Defense Contractors and
Qui Tam Lawsuits
During
the Civil War, Abraham Lincoln enacted the Federal Civil
False Claims Act in response to corrupt defense contractors
that were
defrauding the United States out of vast amount of money and putting troops at risk by
supplying troops with defective products and faulty war
equipment. Unfortunately, some fraudulent defense
contractors and other fraudulent government contractors
have been defrauding the United States and making big
profits. Illegal price gouging and government
fraud has become common practice
and the armed forces of the United States are suffering.
As such, it is now time for whistleblowers and American
heroes to blow the whistle on these contractors that are
defrauding the United States, stealing from the United
States, and placing our troops in danger.
If you are aware of a defense
contractor or other large contractor or subcontractor that
is defrauding the United States Government out of
millions or billions of dollars and or is selling the
United States Defective Goods or Services, contact
Texas Qui Tam
Lawsuit Lawyer,
Jason Coomer, for a free online review of your potential
Defense Contractor Fraud Lawsuit or Qui Tam Lawsuit.
Free free to also use our
online submission form.
History of Qui Tam Lawsuits and Defense
Contractor Fraud Lawsuits
Qui tam lawsuits have existed for centuries
as deceptive government contractors have been around as
long as government contracting has. Qui tam actions
allow a private citizen to file a lawsuit on behalf of
the U.S. government in an effort to recover losses
caused by fraud against the government. The law is an
incentive for civilians who know of individuals or
companies making false claims for profit to come forward
with information. In reward, the "whistleblower" (also
known as the relator) shares in any federal revenue
recovered.
For more on the history of Defense
Contractor Fraud Lawsuits and Qui Tam Lawsuits, go to
the following article on
Qui Tam Claims.
Qui Tam Lawsuits and Defense Contractor Fraud
Lawsuits
In 1986 as a result of increased
government contractor fraud, Congress amended the False
Claims Act in order to make it easier for whistleblowers
to file claims against fraudulent corporations and
individuals. The act also help protect the
Whistleblower or Relator from retaliation.
The 1986
Amendment defines a "claim" as:
"...any
request or demand which is made to a contractor,
grantee, or other recipient if the United States
Government provides any portion of the money or property
which is requested or demanded, or if the government
will reimburse such contractor, grantee, or other
recipient for any portion of the money or property which
is requested or demanded."
The whistleblower's share of recovery
is a maximum of 30 percent and the government's prior
knowledge of fraud now does not necessarily bar a
whistleblower from collecting lost revenue. If the
government took over the lawsuit, the relator can
"continue as a party to the action." The defendant is
also required to pay for the relator's attorney fees.
The whistleblower is also protected from retaliatory
actions by his or her employer. As a result or the
amendment, qui tam lawsuits increased dramatically.
Though the amendment was first made fore corrupt defense
contractors, the amendment has uncovered billions of
dollars in health care fraud.
Anyone who defrauds the government
out of revenue can be held accountable under the False
Claims Act. Common defendants include defense
contractors, health care providers, other government
contractors & subcontractors, state and local government
agencies, and private universities. Whistleblowers
often include current and former employees of the
defrauding company, competitors of government
contractors and public interest groups.
The False Claims Act was enacted to
encourage private citizens to assist the government in
the fight against fraud. Often the whistleblower faces
an uphill battle as large, powerful corporations or
individuals are usually named as defendants. An
experienced attorney in qui tam claims may help you gain
a percentage of stolen government funds. Defense
Contractor Fraud Claims in the News
The United States Department of Defense spending for
goods and services in Fiscal Year 2007 exceeded $300
billion. With this increased budget has come
relaxed oversight and regulation. Quality control
and proper testing of these good and services has become
lax as documentation for large defense contracts has
been reduced allowing fraudulent contractors to get away
with defrauding the Pentagon, Department of Defense, and
United States. Recently several news
stories have surfaced regarding suspected defense
contractor fraud and government contractor fraud.
Below are brief exerts of some news stories on potential
Defense Contractor Fraud Claims and Government
Contractor Fraud Claims. For more information
follow the links to these stories.
Army Overseer Tells of Ouster Over KBR Stir By JAMES
RISEN
Published: June 17, 2008
New York Times
WASHINGTON — The Army official who managed the
Pentagon’s largest contract in Iraq says he was ousted
from his job when he refused to approve paying more than
$1 billion in questionable charges to KBR, the
Houston-based company that has provided food, housing
and other services to American troops.
Qui tam actions
typically revolve around false claims that are either
directly or indirectly presented to the Government for
"payment or approval." These false claims can be generated
through the submission of false bills, records, statements
or other representations made to the Government.
Guilty Plea Given in Iraq Contract Fraud By ERIC SCHMITT
Published: June 11, 2008
New York Times
WASHINGTON — A retired Army colonel who has been a focus of
a wide-ranging criminal inquiry into contracting fraud in
Iraq pleaded guilty on Tuesday to steering a military
contract for warehouses in Iraq to a contractor for $4,000
and a vacation to Thailand....
On Tuesday, the government said in court
documents that in 2005, Colonel Selph served in Baghdad as
head of a selection board that awarded a $12 million
contract to build and operate Pentagon warehouses in Iraq.
The winning contractor was not identified
by name in the court documents made public on Tuesday. But
in previous court papers, the government said Lee Dynamics
International, an American-owned company operating in
Kuwait, was awarded $12 million in contracts in 2005 to
build, operate and maintain several warehouses in Iraq.
Those papers contend that as a result of bribes, the company
illegally received advance information about the contracts.
Iraq Spending Ignored Rules, Pentagon
Says By JAMES GLANZ
Published: May 23, 2008
New York Times
A Pentagon audit of $8.2 billion in
American taxpayer money spent by the United States Army on
contractors in Iraq has found that almost none of the
payments followed federal rules and that in some cases,
contracts worth millions of dollars were paid for despite
little or no record of what, if anything, was received.
The audit also found a sometimes stunning
lack of accountability in the way the United States military
spent some $1.8 billion in seized or frozen Iraqi assets,
which in the early phases of the conflict were often doled
out in stacks or pallets of cash. The audit was released
Thursday in tandem with a Congressional hearing on the
payments.
3 Indicted in a Fraud Scheme on
Military Contracts Overseas By THE ASSOCIATED PRESS
Published: February 13, 2008
New York Times
ATLANTA (AP) — A federal grand jury has
indicted a Florida couple and a North Carolina man in what
prosecutors call a scheme to rig millions of dollars of
water purification contracts for United States military
units overseas, officials said Tuesday.
The accused — Richard E. Long, 63, and
Debra L. Long, 44, of St. Augustine, Fla., and Mack S.
Smith, 56, of Bladenboro, N.C. — are charged with
conspiracy, bribery of a public official, wire fraud and
money laundering, said David E. Nahmias, a United States
attorney.
From 2001 to 2007, Mr. Smith paid the
Longs about $553,700, including down payments for two homes
in St. Augustine, the indictment said.
U.S. Widens Net on Pricing of Food
Supplies for G.I.’s By ERIC SCHMITT and ANDREW MARTIN
Published: October 18, 2007
New York Times
WASHINGTON, Oct. 17 — Federal agents are
investigating whether several large food companies charged
the government excessively high prices for supplies to
American troops in Iraq and Kuwait, administration officials
said Wednesday.
$6 Billion in Contracts Reviewed,
Pentagon Says By ERIC SCHMITT and GINGER THOMPSON
Published: September 21, 2007
New York Times
WASHINGTON, Sept. 20 — Military officials
said Thursday that contracts worth $6 billion to provide
essential supplies to American troops in Kuwait, Iraq and
Afghanistan — including food, water and shelter — were under
review by criminal investigators, double the amount the
Pentagon had previously disclosed.
In addition, $88 billion in contracts and
programs, including those for body armor for American
soldiers and matériel for Iraqi and Afghan security forces,
are being audited for financial irregularities, the
officials said.
Taken together, the figures, provided by
the Pentagon in a hearing before the House Armed Services
Committee, represent the fullest public accounting of the
magnitude of a widening government investigation into
bid-rigging, bribery and kickbacks by members of the
military and civilians linked to the Pentagon’s purchasing
system.
Defense Oversight By Robert O'Harrow (Government
Inc.)
June 10, 2008; 2:25 PM ET
Washington Post
The Inspector General's Office at the Department of Defense
has issued its latest twice-yearly overview of its work.
Sobering stuff.
Billions spent with little oversight.
Poor documentation. No meaningful changes in sight.
We at Government Inc. cringe and warn
gentle-minded readers to think twice about reading on.
Here are some excerpts, in no particular
order:
"The Army and Marine Corps issued
contracts and Federal Supply Schedule orders valued at more
than $5.2 billion for body armor components. The Federal
Acquisition Regulation requires contracting organizations to
maintain adequate contract documentation to provide a
complete acquisition history. Specific information
concerning testing and approval of first articles was not
included in 13 of 28 Army contracts and orders reviewed, and
contracting files were not maintained in 11 of 28 Army
contracts to show why procurement decisions were made."
"From March 2004 through February 2006,
the quality of water provided by contractors, through
treatment or distribution at three of the sites DoD IG
auditors visited, was not maintained in accordance with
field water sanitary standards as specified in the
Department of Army guidance. Although required, KBR did not
maintain the quality of the water it distributed to
point-of-use storage containers at Camp Ar Ramadi, Camp
Q-West, and Camp Victory. Additionally, at Camp Q-West, KBR
improperly provided chlorinated wastewater from its Reverse
Osmosis Water Purification Unit to personal hygiene
facilities."
"The Office of Inspector General Department of Defense is
heavily engaged in combating fraud, waste and abuse. In FY
2007, DoD IG audits achieved $697 million in savings and
identified $1.5 billion in funds that could be put to better
use. Investigative activities identified 413 suspects who
were indicted. Additionally, 307 suspects were convicted of
crimes. All in all, $926 million was returned to the U.S.
Government in investigative fines, restitution, and
recoveries."
Quit Tam Claims, False Claims Act, and Defense
Contractor Fraud Lawsuits There are several types of Qui Tam claims
covered under the False Claims Act:
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Mischarging or overcharging for goods
or services.
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Improper price data and the request
for payment for services never provided.
-
Holding government property for
fraudulent purposes.
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Avoiding payment of a debt to the
government because of illegal reasons.
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Knowingly providing the government
with defective or dangerous products that were falsely
certified.
-
Falsely certifying information for
the entitlement of benefits.
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Having any false claim paid by the
government.
The mischarging
case is the most common type of qui tam case filed.
Mischarging cases generally involve filing false claims for
goods or services that were not provided or delivered. A
common mischarging scenario is employee labor charged to a
government contract not worked on. Other common mischarging
schemes are claims made to the Government for medical
services not rendered or for services performed by an
attending physician when the service was actually performed
by a nurse or other provider that should have been billed at
a lower rate.
Another type of
case is the false negotiation or defective pricing case that
involves the submission of false cost and pricing data to
the Government. This scheme, which takes on many forms,
involves the submission of false costs or pricing data to
the Government during the negotiation of a contract that
subsequently results in an inflated contract price.
Other common
types of cases involve product and service substitution and
false certification of entitlement for benefits. Examples of
product and service substitution are falsely certifying that
a product meets specifications, false testing schemes such
as falsely certifying that reliability testing was conducted
and providing an inferior service or product. Examples of
false certification of entitlement cases are falsely
certifying information for FHA mortgage guarantees and price
supports.
Potential heroes that blow the whistle on
government fraud and corruption include employees, former
employees, high-level executives, sub contractors, general
contractors, and people working with major defense
contractors, telecommunications companies, and large health
care organizations.
Qui Tam Lawsuit Lawyers and Defense Contractor
Fraud Lawsuit Lawyers
If you are aware of a defense contractor or other
large contractor or subcontractor that is defrauding the
United States Government out of millions or billions of
dollars, contact
Qui Tam
Lawsuit Lawyer Jason Coomer. As a Texas
Defense Contractor Lawsuit Lawyer, he works with other powerful
Qui
Tam Lawsuit Lawyers that handle large governmental
contractor fraud cases.
He works with San Antonio Qui Tam Lawyers, Dallas Qui Tam
Lawyers, Houston Qui Tam Lawyers, and other Texas Qui Tam
Lawyers as well as with Qui Tam Lawyers throughout the
nation to blow the whistle on fraud that hurts the United
States and our armed forces.
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