Richard O. was an employee of Lockheed Martin Corporation working for Mission Support Alliance (MSA) in August 2009. Lockheed Martin Services, Inc. (LMSI), a Lockheed Martin subsidiary, and MSA were hired by the Department of Energy to perform environmental cleanup of the Hanford Nuclear Reservation in Washington. Through a subsidiary, Lockheed Martin was one of the owners of MSA, as well.
It was the interconnected nature of the businesses that was part of the problem. According to the Justice Department, since LSMI was an affiliate of MSA, it was not entitled to any profit on the work it performed for MSA on behalf of the Energy Department.
Unfortunately, Richard O. allegedly falsely represented to the Energy Department that LSMI was not to receive any profit under its subcontract with MSA. Further, he allegedly inflated the contract in order to pass profits through to LMSI — and received a kickback of at least $41,480 from Lockheed Martin when he obtained the Energy Department’s consent to that inflated contract.
The Justice Department, Eastern Washington’s U.S. Attorney and the Energy Department’s Office of the Inspector General, working together, charged Richard O. with violations of the federal False Claims Act, which prohibits waste, fraud and abuse in federal contracts.
Richard O. agreed to settle the matter without a determination of liability. He was required to pay back triple the amount he gained from the alleged fraud, or $124,440.
“This settlement requires Mr. Olsen to pay back three times the amount he received from the alleged fraud and holds Mr. Olsen accountable for his actions,” said the U.S. Attorney for Eastern Washington. “It also sends a strong message to those individuals who may engage in similar conduct.”
The alleged fraud was discovered in large part due to the work of the Department of Energy’s Office of Inspector General in collaboration with the Justice Department.
“The Department of Energy Office of Inspector General is committed to ensuring the integrity of our contractors and subcontractors by detecting and holding accountable those who choose to engage in false claim and kickback schemes,” said the acting head of the office.
Fraud and kickback schemes are all too common in government contracting. If you work in healthcare, defense contracting or another area involving contracts with the government, you may be in a position to notice fraud, waste or abuse. If you successfully blow the whistle on illegal conduct, you could be entitled to a substantial percentage of the money recovered as a reward for your services.
To ensure you receive what you are due without undue risk, work with an attorney familiar with whistleblower law.