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: Costs that are submitted for reimbursement under a T&M contract are much greater than was estimated in the contract proposal. These are just a few examples of how a government contractor can scheme to defraud the government and, ultimately, the taxpayer. All of the aforementioned schemes cause the submission of false claims for reimbursement to the U.S. government, which triggers coverage under the False Claims Act. A Successful Prosecution
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. 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.