The federal government spends billions of dollars annually on our nation’s defense. The goal is to ensure that the country and its foreign interests abroad remain safe. A large portion of our defense spending goes to private contractors who manufacture equipment, maintain it, augment military personnel, feed and house staff, and provide other services.
Many safeguards and regulations are designed to prevent theft and fraud, but the sheer scope of the work and the amount of money involved can lead to fraudulent schemes where contractors steal from taxpayers. Fortunately, whistleblowers have stepped forward countless times to help the government recover billions of taxpayer dollars.
Common fraud schemes
Military contractors may try to steal or scam. Still, there may also be ways where they violate regulations and requirements or otherwise cut corners to deliver a product that is less than promised. Some of the most common schemes include:
- False statements: The contractor may knowingly make false statements that enable them to land a contract.
- Deceptive pricing: They violate the Truth in Negotiations Act, which requires purchases to be fair and reasonably priced products and services.
- Falsely claiming compliance: They may knowingly violate such requirements as the Buy American Act, U.S. trade agreements and other compliance rules.
- Illegal business practices: As with any industry, offering or accepting bribes, kickbacks or engaging in bid-rigging is unlawful.
- Fraudulent billing: This can involve submitting unnecessarily inflated bills or bills for work not performed.
- Cross-charging: Moving costs from one contract to another.
People can step forward
Innovation comes in many forms, and unfortunately, fraudsters and criminals also innovate. Still, government agencies have different venues for reporting illegal or improper actions. Whistleblowers can maintain their anonymity in many cases. Moreover, the federal government commonly awards whistleblowers who aid investigators with 10% to 30% of funds recovered with their help.