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Former Marine Whistleblower Uses False Claims Act to Expose Fraudulent Billing Against U.S. Department of Defense

Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for above-the-bar-logo.jpgThe government recently settled a claim with The Boeing Company (“Boeing”) for violating the False Claims Act by allegedly engaging in improper billing practices pertaining to Army contracts to make and modify Chinook helicopters. Boeing is the world’s leading aerospace company and the largest manufacturer of commercial jetliners and military aircraft. It provides major services to NASA as well as numerous military services.

Beginning in 2003, the U.S. Department of Defense awarded Boeing contracts to manufacture and modify Chinook helicopters to enable the Army to modernize its fleet of heavy lift helicopters. The Chinook helicopters, which date back to the Vietnam era, are used today for combat operations and civil and humanitarian missions around the world. The government ordered over 100 helicopters and Boeing had agreed to “remanufacture” several hundred older Chinook helicopters by overhauling their airframes and putting in upgrades.

According to the contracts, the government had paid for most of the remanufacturing work with a pre-negotiated price. However, its investigation revealed that several Boeing managers had told their mechanics who were working on the Chinook program to perform other, nonbillable work while separately billing the government for their time. This resulted in the government being charged for work that it had already paid for.

The settlement provides for Boeing to pay the U.S. about $4.4 million and also requires it to implement several measures to ensure that this does not occur again. This includes training its employees and improving the software it uses to track billing. Boeing will also, over the next few years, implement a new labor tracking computer system for its defense manufacturing facilities across the country to make sure that the same problem that occurred at its Ridley plant does not happen at its other facilities.

This case was brought to light by a whistleblower, Vincent A. DiMezza Jr., a production manager at Boeing’s plant in Ridley. DiMezza, a former U.S. Marine, filed the lawsuit in February 2010 in conjunction with the government. For his part, DiMezza will receive between 15 to 25 percent of the government’s recovery.

Under the qui tam provision of the False Claims Act, if you have knowledge of fraud being committed against the government, you may bring an action on behalf of the government. Depending on whether or not the government intervenes and takes over your lawsuit, you may recover anywhere from 15% to 30% of the government’s recovery.

It’s important to remember that if you do observe fraud being committed against the government, it is your taxpayer dollars that are being stolen. Although, Boeing cooperated with the government’s investigation, this fraudulent billing practice would have continued had DiMezza not blown the whistle. If you observe fraud being committed against the government, don’t just stand by and watch. Although the False Claims Act is a complicated statute with strict requirements, your monetary recovery and knowing that you are stopping fraud can be worth the effort. Do the right thing and call our experienced qui tam Whistleblower Attorneys at Villanueva & Sanchala at (800) 893-9645 to help you determine if you have a case under the False Claims Act.

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Other Sources:

United States Settles With Boeing Over Improper Billing, Department of Justice