Inflating Costs for Labor or Materials
Inflating the costs for labor or materials hurts the American taxpayers
One of the most common violations of the False Claims Act involves overcharging the government for the costs of goods and services, or charging the government for goods and services that were not delivered at all. Contractors who get away with such cost inflation illegally line their pockets with taxpayer dollars at the expense of needed programs and projects.
Fortunately, whistleblowers who step forward to expose government contractor and procuerment fraud serve to prevent the unnecessary waste of government dollars by helping to reimburse the government and punish the wrongdoers. Those who file False Claims Act complaints to fight this sort of fraud are also entitled to a portion of any judgment or settlement against the offending contractors.
Examples of inflating the costs for labor or materials include the following:
- In January 2012, Maersk Line Limited settled a False Claims Act case with the U.S. government, agreeing to pay $31.9 million to resolve allegations that the company knowingly overcharged the Department of Defense for the transport of thousands of containers for use in the war efforts in Iraq and Afghanistan. Read more…
- Software giant Oracle entered into the largest-ever settlement in the history of the False Claims Act in October 2011, agreeing to pay $199.5 million to resolve accusations that the company overcharged the federal government. Read more…
- Lockheed Martin Corp., the largest defense contractor is the U.S., settled a False Claims Act case in March 2012 for $15.85 million. The lawsuit, filed in Dallas federal court, alleged that Lockheed and its subcontractor, Tools & Metals, Inc., engaged in a seven-year pricing fraud by mischarging the federal government for tools used on military aircraft. The subcontractor allegedly inflated the costs of certain perishable tools to Lockheed, and Lockheed passed the excessive costs on to the government. Read more…
Contractors that overcharge the government cost taxpayers millions. Whistleblowers can help stop them.
Government overcharges by unscrupulous contractors cheat taxpayers out of millions of dollars. Whistleblowers with knowledge of contractors that break the law are often in the best position to expose such wrongdoing and prevent government waste. Individuals who bring False Claims Act cases on behalf of the government to expose such fraud are entitled under the Act's qui tam provisions to a portion of any judgment or settlement with the government.