Government Contract Cases


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....


Shipbuilding Defense Contractor Will Pay $9.2 Million to Resolve Allegations of Overbilling

Shipbuilding Defense Contractor Will Pay $9.2 Million to Resolve Allegations of Overbilling

Virginia-based Huntington Ingalls Industries Inc. (HII), the only U.S. defense contractor capable of building nuclear-powered aircraft carriers, will pay $7.9 million to complete a $9.2 million settlement that resolves False Claims Act allegations that it overbilled the government for work on both Navy and Coast Guard ships.
According to the allegations first brought forward by whistleblower Byran Faulkner, Huntington Ingalls Industries Inc. has been mischarging and overbilling the...

ADS to Pay $16M on Whistleblower Allegations of Defense Contract Fraud

ADS Inc., a Virginia-based company that supplies equipment and logistics for the U.S. military´s search-and-rescue operations, has agreed to pay $16 million to resolve allegations that it fraudulently secured government contracts. 

ADS obtained numerous contracts that were set aside for small businesses, in spite of the fact that the company made $1 billion from federal contracts alone in 2016, which hardly qualifies for the “small business” category.  

ADS Scheme Exposed – Manufactured Front Companies

According to the Justice Department, ADS created a network of smaller companies in order to access contracts through federal programs meant to help small businesses secure them....


Advanced C4 Solutions Pays $4.535M in SPAWAR Defense Contractor Fraud Settlement

Advanced C4 Solutions Pays $4.535M in SPAWAR Defense Contractor Fraud Settlement

Florida-based Advanced C4 Solutions, Inc. agreed pay $4.535 million to resolve claims that it violated the federal False Claims Act by knowingly overbilling the government for work performed under an Air Force technology contract at Maryland’s Joint Base Andrews.

Defendants Andrew Bennett and James Shank pleaded guilty to conspiracy to commit wire fraud, according to Department of Justice information.

Feds Say Contractors Charge U.S. For Nonexistent Labor Hours, Ineligible Job Rates

The settlement agreement stems from alleged activities beginning in June 2010, when the U.S. Navy’s Space and Warfare Systems Command (SPAWAR) granted Advanced C4 Solutions a contract titled “DO 27” to perform labor and project management services for an Air Force technology project....


Energy & Process Corporation Facing Substandard Materials & Fake Certs at Nuclear Site Lawsuit

Energy & Process Corporation Facing Substandard Materials & Fake Certs at Nuclear Site Lawsuit

The government has joined a False Claims Act lawsuit against Energy & Process Corporation (E&P), which was filed by whistleblower Deborah Cook. According to the qui tam (False Claims Act whistleblower) lawsuit, E&P supplied defective reinforcement bar (rebar) for the construction of a nuclear processing  facility in the Department of Energy’s Savannah River site in South Carolina. 

Georgia-based E&P received millions of dollars from the federal government to perform critical safety work on rebar that was used to build the Savannah River Site facility, also known as the MOX Facility, which was designed to process nuclear waste. As the lawsuit states, because of the hazardous nature of the radioactive material, the facility was “required to be built to withstand earthquakes.”...


Global Top 10 False Claims Act Offender: Boeing – Government Contract Schemes

Global Top 10 False Claims Act Offender: Boeing – Government Contract Schemes

In October 2015, whistleblower James Thomas Webb received a $3,115,000 cash award after filing a False Claims Act (FCA) lawsuit alleging Boeing Company submitted false claims for labor charges on C-17 maintenance contracts. Boeing paid a total of $18,115,000 to settle the allegations.

Mr. Webb is not the only Boeing employee who has brought a whistleblower lawsuit against the world’s largest commercial jetliner and military aircraft producer. The Project on Government Oversight’s Federal Contractor Misconduct Database reports 66 instances of misconduct since 1995. Boeing has racked up over $1,456,789,469 in penalties in that time. For decades, Boeing has continued to violate U.S. rules and regulations, wasting taxpayer dollars and putting our nation’s citizens and armed forces at risk....


Defense Contractor Cybersecurity Breaches Bring Wave of Cyber Whistleblower Opportunities

Defense Contractor Cybersecurity Breaches Bring Wave of Cyber Whistleblower Opportunities

Failure to report cyberattacks among Department of Defense (DOD) contractors and subcontractors means big whistleblower opportunities for IT professionals and other defense contractor employees. Cyber hacking and cybersecurity breaches are widespread, and a whole new category of cyber whistleblower claims are cropping up around them under the federal False Claims Act.

Cybercrime Could Cost U.S. Companies $2 Trillion by 2019

Cybercrime cost U.S. companies approximately $500 billion in 2015. This number could quadruple to $2 trillion by 2019. Cyber hacks into the computer networks of private vendors that supply aircraft, ammunition, radar technology and specialized software to all areas of our U.S. defense agencies present a significant danger to national security and members of our armed forces. Because of this, federal rules and regulations on cybersecurity continue to tighten....