Whistleblower- Defense Contractor Fraud

The military is one of the federal government’s largest expenses, spending over $550 billion per year on defense alone. A large portion of this money is focused on upgrading weapons and systems, and many of these transactions are between the government and private businesses known as defense contractors.

Defense contractors are no exception to fraud schemes. They are frequently investigated and sanctioned for fraud under the False Claims Act. There are likely many more instances than the government is able to catch onto. Whistleblowers are the most effective way to target fraud in these types of organizations. Billions of dollars have been recovered because of the actions of whistleblowers.

The False Claims Act is a federal statute that allows individuals to bring a lawsuit against an individual or party that they have reason to know is defrauding the government. Whistleblowers are then entitled to a portion of the money recovered, which in some cases could be several million dollars. Whistleblowers are extremely important in protecting not only the government, but the American taxpayers. Every single taxpaying American has an interest in rooting out this fraud.

Common Ways Defense Contractors Commit Fraud

Defense contractors enter into contracts with the federal government to provide products and serviced to the military or other intelligence agencies. Here are some of the most common fraud schemes.

• Cross-charging. This is when a contractor shifts costs and expenses from one contract to another, likely from a cost-plus contract to a fixed-price one or visa versa.
• Bid rigging. Contractors often have to bid for government projects. Any collusion during this process is fraudulent.
• Falsifying invoices and overcharging. Cost-plus contracts are ones in which the government pays a set price in addition to a percentage of the contractors costs. Contractors may try and present that they spent more than they actually did to be overcompensated.
• Unfortunately, some contractors may try and cut corners when it comes to manufacturing products for military personnel. The use of inferior or unsafe products can be catastrophic in the military leading to injury or death.
• Failure to provide “best price” to the government. The Truth In Negotiations Act (“TINA”) forces contractors to disclose costs associated with the product. This tries to prevent contractors with a monopoly on a product from overcharging the government. Inflating costs and expenses is a violation of the False Claims Act.

What Should I do Next?

If you are current or former defense contractor employee and believe your employer was defrauding the government, contact us today. You may be entitled to a significant reward. Whistleblowers are entitled to between 15% and 30% of the total amount recovered by the federal government. Not only will we fight to get you appropriate compensation, but we will protect you from any retaliation by your current or former employer.

Our attorneys understand that the decision to come forward about fraud within your own workplace is a difficult one. An important thing to remember is that when it comes to defense contractors, cutting corners could be the difference between life and death for those on the frontlines of our military. Your decision to come forward is a service to them. That is why we are here to guide you through every step of the process. At the law firm of Altman & Altman, our group of skillful Whistleblower Lawyers will be by your side every step of the way to help you navigate these difficult waters. To schedule your free consultation with an experienced whistleblower attorney at Altman & Altman LLP, call 617.492.3000 or contact us through our convenient online chat.