Title: Mischarging Costs: Another Form of Procurement Fraud
Headings: Mischarging Costs: Another Form of Procurement Fraud
Mischarging Costs: Another Form of Procurement Fraud
A Successful Prosecution

Content: In January 2012, the U.S. Department of Justice settled a False Claims Act case against Maersk Line Limited for $31.9 million to resolve allegations that the company submitted false claims to the government in a mischarging costs case involving the transport of cargo to support our soldiers in Afghanistan and Iraq. In this case Maersk used a variety of mischarging cost schemes, including billing in excess of an agreed upon price, billing excessive late fees, billing for delays that were improperly attributed to the U.S. government, billing for GPS-tracking and security services that either weren’t provided or were only partially provided, and failing to credit the government for rebates Maersk received from a subcontractor that should have been passed on to the government. How did the government learn of these schemes? A brave whistleblower by the name of Jerry H. Brown II, a former industry insider, came forward and provided the information to his attorneys. They, in turn, filed a lawsuit under the qui tam, or whistleblower, provisions of the False Claims Act, which permits an individual or individuals, called “relators,” to bring lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against the defendant. For his assistance in helping the government recoup the $31.9 million, Brown received $3.6 million. As this important case illustrates yet again, whistleblowers are a critical link in ferreting out procurement fraud and mischarging costs that can, and do, occur in government contracting. If you have witnessed any form of government procurement fraud, including fraud in defense contracting or fraud tied to government healthcare programs, coming forward can provide both peace of mind and potential financial rewards. Partnering with our investigative team and attorneys who have significant knowledge of the False Claims Act (including its whistleblower protections and potential rewards) is a necessity in today’s crowded legal environment. Call us today to discuss in greater detail how we can work together to put a stop to cost mischarging by government contractors.