Wednesday, May 4, 2016

Two Military Shipping Contractors Agree to Pay $13 Million to Settle False Claims

The Justice Department announced today that two military freight shipping contractors have agreed to pay $13 million to settle false claims allegations brought be two whistleblowers. The two whistleblowers will receive 22 percent of the settlement amount or $2.9 million (less what the law firm representing the whistleblowers keeps). One of the whistleblowers was immediately fired by the contractor when it learned of his involvement with investigators. The ensuing wrongful termination suit is still pending.

The fraud was not sophisticated. The two contractors,

  1. Claimed reimbursement for shipments by air when trucks were used.
  2. Inflated charges for fuel
  3. Charged extra for over-sized freight when the freight did not meet the over-size standard.

It took about three years from when the whistleblowers made their allegations to the time of settlement. That's not bad for a "qui tam" action.

The Justice Department credited the whistleblowers for their courageous action. The Department stated:
Without the courageous help of these two whistleblowers, the government might never have learned of the inflated charges for shipments.
The Justice Department also vowed to "vigorously pursue" the fired whistleblower's employment claims by "fully intending" to obtain for him the double damages and other remedies provided to whistleblowers who are retaliated against under the False Claims Act.

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