Three former employees of a UK-based marine services contractor called Inchcape Shipping Services Holdings Limited filed a lawsuit accusing Inchcape and some of its subsidiaries with intentionally defrauding the U.S. Navy. The federal government intervened in the case, which was brought under the False Claims Act. Under the FCA, the government can obtain triple damages and penalties from parties who commit fraud in relation to government contracts.
Private citizens who blow the whistle on such fraud can also obtain a percentage of the total recovery. In this case, the three former employees will share an award of approximately $4.4 million.
After an investigation by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Columbia, the Navy, and the Naval Criminal Investigative Service, Inchcape agreed to pay $20,000,000 to settle the allegations.
According to the Justice Department, Inchcape provided ship husbanding services for Navy ships in a number of ports around the world. These services included things like providing food and subsistence items, removing waste, setting up telephone services, force protection, and arranging ship-to-shore and local transportation.
Between 2005 and 2014, prosecutors say, Inchcape knowingly submitted false invoices. The invoices not only overstated the amounts of goods and services provided but also billed at rates exceeding the contract rates and even double-billed for some items.
“Fraud is an abuse of the system that siphons resources away from the American warfighter,” said a spokesperson for the Naval Criminal Investigative Service. “NCIS will continue to work with our law enforcement partners to hold responsible those who would put personal gain above corporate integrity.”
Naturally, whenever private contractors perform contracts for the federal government, they are expected to adhere to the terms of those contracts. False Claims Act suits can be brought in many cases where fraudulent or inflated bills are submitted.
Often, the people in the best position to notice false or fraudulent billing schemes are employees of the contracting organization. They can do the right thing — and obtain a potentially large award — by blowing the whistle on such schemes.
However, potential whistleblowers need to protect their rights to those awards by ensuring their claims are handled correctly. They also need to protect themselves from possible retaliation by their employers. To get started, discuss your concerns with an attorney familiar with the False Claims Act and whistleblowing.