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Government Contract Fraud

Government contract fraud whistleblowers can receive a substantial reward for reporting fraud. Whistleblowers have helped the federal government recover more than $28 billion. You can receive between 15-30% of the government’s total recovery.

About Government Contract Fraud

Government Contract FraudGovernment contract fraud has increased in recent years. Contractors and subcontractors try to increase profits by defrauding the US government. They do this in a variety of ways. Some are providing defective goods, cross charging, making false certifications of services provided, charging for services or goods not provided, violating the Truth-in-Negotiations Act (TINA) or making improper cost allocations. This can cost the government billions.

When a person has independent knowledge of fraud committed against the government by government contractors or subcontractors, they can put a stop to it. If they are the first to do so, they can recover a large financial reward.

Common Government Contract Fraud Cases

There are many different types of fraud, but these are the most common.

Progress Payment Fraud

Contractors submit payments to the government, and the governmental agency pays based on costs incurred or the phase of completion. The Government does not audit the payments beforehand, therefore shady contractors can pad the invoices. Receiving more money than needed is progress payment fraud. Either the contractor included erroneous labor charges for work not yet performed, charges for materials not purchased, or false documentation of the phase of completion.

Nonconforming Materials Fraud

Fraud involving nonconforming materials occurs when government contractors falsely document all materials meeting the contract specifications. They can also deliver inferior or substandard items. Many also substitute what they originally promised. Contractors swap and use lower quality items such as counterfeit, defective, reworked, or used items. Another issue could be some items that have not been tested or the results are falsified.

Cost Mischarging Fraud

Cost mischarging fraud occurs when a contractor charges the Government for costs not in the contract or overcharges the Government.  These are commonly referred to as Invoice Schemes. A vendor submits fraudulent invoices to generate false payments through false invoices, inflated invoices or duplicate invoices.

Defective Pricing

Defective pricing occurs when a contractor agrees with the Government on a certain amount. Then, the vendor increases the cost. They will claim this happened for a variety of reasons. Either the rise in cost is a tier pricing system,  the original invoice was incomplete, a subcontractor made an error or they forgot to use the current pricing data.

Other Types

Here are the other types of claims:

  • Bid-Rigging
  • Price Fixing
  • Breach of Contract
  • Substituting Products
  • Inflating Costs or Overbilling
  • Providing False Information
  • False Labor Standards (Davis-Bacon Act)

For example, if a government contractor misrepresented its capacity to produce what was required by the contract or misrepresented itself as a small, disadvantaged, or minority enterprise — when it was not — in order to procure a government contract, the contractor would be liable for damages under the False Claims Act.

Government fraud happens in many different avenues in the contract process. During the bidding, negotiation, and performance of a contract with the Government, a contractor will be required to submit certificates and affidavits. These contracts involve a number of different agencies or departments. The departments involved can be The Department of Defense, The Department of Veterans Affairs, The Department of Housing and Urban Development, The National Aeronautics and Space Administration, and the General Services Administration, among other procuring agencies.

These are crucial to provide a foundation for false claims.

Previous Government Contract Fraud Cases

The United States Department of Justice has a history of working closely with whistleblowers to recover fraudulent amounts or goods that can affect our military and civilian agencies that affect our men and women fighting in Iraq and Afghanistan.

One of these cases was against Public Warehousing Company. A whistleblower alerted the government to their defective Zylon fabric used as the key ballistic metal in the bulletproof vests they sold. The federal, state, local, and tribal law enforcement agencies used these vests. The investigation has revealed that these vests degraded quickly over time due to heat and humidity and were unfit for ballistic use. Thus far, the Department has obtained more than $59 million, and the investigation continues today.

Since January 2009, fraud cases even those not war-related amounted to over $1 billion in recovered assets. This includes more than $718 million attributable to Department of Defense contracts. Whistleblowers received 15-30% of those funds.

Using The False Claims Act, the US Department of Justice aggressively pursues fraud especially those connected with the wars in Southwest Asia. The Civil Division recovered $10.6 million in just 2010 alone.   To date, settlements and judgments involving the wars in Southwest Asia alone total $152.2 million.

About the Whistleblower Statute

In 1863 to combat fraud in Union contracts during the Civil War, Congress passed The Whistleblower or Qui Tam statute. In 1986, Congress modernized the Whistleblower statute and renamed it to the False Claims Act. This is the government’s primary tool to combat fraud. Individuals who report government-program fraud bring the lawsuit on behalf of the government.

The Law Protects and Rewards a Whistleblower

MoneyWhen a knowledgeable attorney like those found at The Michael Brady Lynch Firm files a False Claims Act lawsuit, he or she files it under a seal. This means it is completely confidential. There is also a full disclosure statement in the suit, which details the evidence collected by a whistleblower.

After we file your suite, the Department of Justice will review the evidence before deciding to step in and decide if they want to prosecute the case. The government’s fraud investigator will work closely with you, the whistleblower to identify all responsible for the fraud.

You could be entitled to 15-30% of the funds recovered. In order to receive the reward, you must be the first one to file a case under the False Claims Act. This is why it is key to pick an experienced attorney to work quickly get your compensation.

Premier Complex Litigation Attorneys

Whistleblower Lawsuit Supreme CourtThe Michael Brady Lynch Firm has successfully represented thousands of consumers and recovered millions of dollars for their clients. Our team of attorneys has been recognized as some of the most experienced and successful in the country. Our award-winning staff is also sought after for our knowledge on complex litigation, scientific evidence development, negotiation strategies and trial tactics.

Most of all, our law office is resourceful and dedicated to pursuing any compensation you are due. Because of this, we have received a high degree of peer recognition and professional achievement, such as inclusion on numerous Plaintiff Steering Committees.  We will take whatever legal measures are necessary when fighting for your rights to damages.

Therefore, if you believe you have uncovered evidence of fraud involving a government-funded program, contact us today. Our attorneys have represented many clients in the past with complex cases. We will work tirelessly to obtain results on your behalf.

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