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.

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

According to the allegations first brought forward by whistleblower Byran Faulkner, Huntington Ingalls Industries Inc. has been mischarging and overbilling the government on numerous Navy and Coast Guard contracts since 2003.

Allegedly, HII also billed the government for dive operations in connection with shipbuilding, which never took place.

Whistleblower, Bryon Faulkner, first became aware of the irregularities when he became a foreman at HII in 2012. The Jackson County resident refused to lie in work reports in order to maximize incentive pay on government projects. As a result of his refusal to play along with the fraud, Faulkner suffered retaliation. This led to a heart attack and a crippling diagnosis of “disabling clinical depression and anxiety.”

Huntington Ingalls Industries to Employee – Cheat or Suffer the Consequences

In his qui tam lawsuit, Faulkner signaled fraud by over 20 HII directors, supervisors, and employees, who allegedly lied in time sheets related to work done for the U.S. Navy and Coast Guard. Ingalls General Foreman Neal Holden allegedly told Faulkner, “If you don’t play the game, you are not going to be a foreman for very long.”

When the company threatened to fire Faulkner, he ended up resigning. His main concern has always been with the true victims of the fraud, namely, taxpayers.

For his efforts and assistance in uncovering the misconduct, Faulkner will receive a $1,590,144 whistleblower award. Under the qui tam provisions of the False Claims Act, individual citizens can sue fraudsters on behalf of the government and share in any resulting recoveries.

DOJ’s Readler – Serious Consequences for Cheating the U.S.

Upon the announcement of the settlement, Acting Assistant Attorney General Chad A. Readler of the DOJ’s Civil Division, commented, “Contractors that knowingly bill the government in violation of contract terms will face serious consequences... This settlement demonstrates, once again, that we will not tolerate defense contractors who falsely charge the armed forces or any agency of the United States.”

According to Mike Wiest, Special Agent in Charge of the Naval Criminal Investigative Service, "Corruption, fraud and bribery are not victimless crimes. Overcharging for work not done is not only criminal on its face, investigating those crimes siphoned resources and time which would have been better invested in protecting the nation. Multiple federal agencies spent years investigating this lack of integrity, to help hold accountable those who would squander American taxpayer dollars."

This was the second largest settlement ever reached in Mississippi’s Southern District, where the shipbuilding activities took place. The government hopes it will become a deterrent for dishonest defense contractors in the future.

Are you a current or ex-employee of a Department of Defense military contractor and have evidence of over-billing or charging for work never performed? We are working on a number of stories about military contract schemes and would appreciate your information. We can keep your identity confidential.  Call Us at 202.787.3875 or Email Us

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