Defense Contractor to Pay DOJ $4.2 Million

(This post was written by whistleblower investigator Lee Walters.)

In a recently announced settlement with the U.S. Department of Justice, defense contractor PAE Applied Technologies, LLC (“PAE”) agreed to pay $4.2 million to the federal government to settle a qui tam filing while admitting no liability.

The settlement resolves allegations by Relator James Hughes, a former PAE employee, that the company engaged in a scheme to defraud the government by requesting wage increases for their employees that were never actually paid to those employees.  In his case, Relator Hughes had claimed the company had the government pay wages higher than what union contracts required and never intended to pay those higher amounts to its employees. 

This is a new and unique scheme in the defense contracting arena. A more common scheme is for a defense contractor, or a contractor working on non-defense related federal projects, to be awarded a federal contract and then pay its employees less than the prevailing wage under the Davis-Bacon Act. This law requires that any contract over $2,000 to which the United States or the District of Columbia is a party to, for the construction, alteration, or repair of public buildings or public works, shall contain a clause setting forth the minimum wages to be paid in the contract. The U.S. Department of Labor publishes annually a list of tables showing the prevailing wage, and benefits, for all covered classes and geographies. 

Morgan and Morgan takes pride in representing whistleblowers who chose to stand up against cheaters and fraudsters. We strongly encourage prospective whistleblowers to obtain counsel to assist them in filing whistleblower complaints. Our team of experienced lawyers and investigators will be with you during the entire time from the initial filing to the ultimate resolution. Our work is always done on a contingency basis — you don’t pay anything up front. If you know of a company that is involved in underpaying its employees on a federal government contract, contact us and let’s discuss how we can help you. We can determine what the prevailing wage and benefits is for any covered employee in any geographical location. All calls and information shared are treated confidentially.