Dept of Defense Fraud

Defense contractor fraud, purchase and procurement fraud and other schemes are frequently employed to divest the government of federal funding and rob everyday citizens of their hard earned cash.

Department of Defense (DOD) whistleblowers play an essential role in protecting taxpayers and the government from contractors that take their money under false pretenses. If you are a current or former defense contractor employee with knowledge of a scheme to defraud the government, you may be able to help stop a crime against American taxpayers, and receive a substantial financial reward, by blowing the whistle. Under the False Claims Act, whistleblowers can receive between 15% and 30% of the total amount collected by the federal government, which can be as high as three times the amount of the false claims.

If you are considering blowing the whistle on fraud against the Department of Defense, it is important to remember that when military contractors supply the armed services with defective goods or equipment, soldiers’ lives are put in jeopardy. By interacting with the government and the military on your behalf, our attorneys can help you maintain your confidentiality and protect you from retaliation.

To find out more information about how you can help put an end to defense contractor fraud, please contact us today. Any discussions you have with our attorneys are strictly confidential and protected by the attorney-client privilege.


Cases Our Attorneys Handle

Our whistleblower attorneys handle cases involving the following types of DOD contractor fraud:

  • Billing for services that were not provided
  • Selling defective parts or parts not manufactured in accordance with contract specifications
  • Failing to notify the government about product defects when they are discovered
  • Selling used or refurbished parts, but charging for new parts
  • Cross charging on fixed-price and cost-plus contracts
  • Violating the Truth In Negotiations Act
  • Making false statements when bidding for a contract
  • Providing products or services to the government that fail to comply with the government’s procurement regulations such as labor standards, worker health and safety rules, or environmental standards.
  • Overstating the number of hours worked on a project
  • Providing substandard supplies, food products, or safety gear

It is believed that defense contractor fraud occurred frequently during the wars in Iraq and Afghanistan. The Office of the Inspector General (OIG) at the Department of Defense has been aggressively pursuing investigations against defense contractors that submitted false claims in connection with these military actions. As part of these efforts, the Justice Department recovered $73 million in 2012 through whistleblower lawsuits relating to the wars in Iraq and Afghanistan.

Our qui tam lawyers are willing to prosecute valid claims against any defense contractor engaging in fraud, no matter how large, including:

  • Boeing
  • Lockheed Martin
  • Northrop Grumann
  • General Dynamics
  • L-3 Communications
  • United Technologies
  • CSC
  • Honeywell
  • Pratt & Whitney
  • KBR
  • Halliburton
  • SAIC
  • Raytheon

Defense Contractor Cross Charging Fraud

In general, there are two types of government defense contracts – fixed-price contracts and cost-plus contracts:

  • Under fixed-priced contracts, the government contractor receives a fixed price for the goods or services provided. The contractor is not compensated based on the costs actually incurred in providing the goods or services.
  • Under a cost-plus contract, the contractor is paid a fixed amount for the goods or services, plus an additional amount based on the actual costs of production.

Many defense contractors provide the government with different goods or services under both fixed-price contracts and cost-plus contracts simultaneously, giving the company an opportunity to fraudulently shift costs from a fixed-price contract to a cost-plus contract.

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Violations of the Truth in Negotiations Act

The Truth in Negotiations Act requires defense contractors to disclose all factual information about their costs to the federal government. This law is intended to protect the government from being overcharged for goods and services. Under the Truth in Negotiations Act, government contractors must supply the government with good faith estimates of the costs involved in providing goods or services.

The defense contractor must also certify that the cost estimates are accurate and current. In some cases, government contractors knowingly submit artificially low bids and then use various methods to recover their costs by increasing the amount of total compensation received under the contract.

Examples of Successful DOD Whistleblower Lawsuits

In a high-profile case, Maersk Line Limited settled a whistleblower lawsuit for $31.9 million to resolve allegations that the company knowingly overcharged the Department of Defense to transport cargo to U.S. troops in Afghanistan and Iraq. The shipping company also allegedly billed for security services that it failed to provide, charged excessive amounts for holding perishable cargo at U.S. military bases in Afghanistan, and charged the government excessive late fees. The whistleblower in this case received a reward of $3.6 million.

Whistleblower lawsuits involving defense contractors that supplied the government with defective or substandard products have been on the rise in recent years. For example, one case resulted in a $37 million settlement with ATK Launch Systems to resolve allegations that the company sold defective illumination flares, used for nighttime combat and for search and rescue operations, to the Army and Air Force.

Choosing to blow the whistle on your employer can be a difficult decision. It takes courage and conviction, but the rewards can be great. Our attorneys are here to answer your questions, and to help you fight for what’s right. To confidentially discuss your defense contractor fraud case with an experienced lawyer, please contact us by phone number or through the form on the right.

Army Fraud

In a whistleblower lawsuit involving Army fraud, waste, and abuse, Boeing agreed to pay more than $4.3 million to settle claims that it overbilled the government in fulfilling a contract to manufacture, modify, and repair Chinook CH-47D helicopters. As alleged in the lawsuit, Boeing’s contract with the Army divided the work into two categories for billing purposes: “basic” and “over and above.” The whistleblower alleged that Boeing mechanics performed work that should have been billed as basic, but charged the work to the over and above billing code so that Boeing would receive additional compensation under the contract.

Navy Fraud

A machinist employed by Department of Defense contractor Lucas Industries filed a whistleblower lawsuit alleging that the company failed to properly test naval airplane parts and knowingly shipped defective equipment to the Navy. According to the whistleblower lawsuit, Lucas Industries falsified manufacturing and assembly inspections of aerospace gearboxes of the Navy’s F/A—18 Hornet, a carrier-based fighter jet. The whistleblower provided information that the company concealed imperfections and fractures by plating them with chrome, then defrauded the government by knowingly shipping the non-conforming and defective parts to the Navy. In exchange for exposing the fraud, the whistleblower received $19,360,000, an award equal to 21% of the $88 million recovered by the Department of Justice.

In another whistleblower lawsuit, a civilian Navy employee allegedly received kickbacks from a Navy contractor. As alleged in the whistleblower lawsuit, the Navy employee approved fraudulent payments to the contractor, Advanced Solutions for Tomorrow, in exchange for kickbacks. An executive at the contractor admitted to paying more than $8 million in bribes over a ten-year period. The now-defunct company at one time had more than $120 million in contracts with the Navy.

Air Force Fraud

To settle an Air Force fraud whistleblower lawsuit, General Electric agreed to pay $7.1 million in a case involving allegations that the company sold several thousand jet engines to the Air Force that did not comply with certain military requirements. As alleged in the lawsuit, GE delivered jet engines to the Air Force even though the company knew the engines did not satisfy the electrical bonding requirements, as required under contracts with the Department of Defense. After the lawsuit was filed, the Air Force tested the engines and found them to be defective and unsafe. The whistleblower, an engineer in one of GE’s aircraft engines plants, received a whistleblower award of more than $1.7 million for helping to expose the fraud.

The Department of Defense relies on contractors and suppliers to provide the armed services with a wide variety of goods and services. While these companies are allowed to make a profit on government contracts, they cannot use fraudulent means, such as overbilling or improper substitution of goods, to artificially inflate revenues.

If you have knowledge of a Department of Defense contractor fraud against the armed services, please contact our whistleblower attorneys for a confidential consultation. Our experienced attorneys can review the facts of your situation and help you make a decision about blowing the whistle on fraud, waste, and abuse.