As we have reported in the past, fraud against the United States military perpetuated the need for a federal False Claims Act during the Civil War, and this sort of misconduct continues to infiltrate the Department of Defense even today. At the inception of the False Claims Act, the government was paying exorbitant rates for uniforms, ammunition, and supplies – only to be defrauded with non-compliant (or non-existent) goods and services. In response, the Lincoln administration initiated the first False Claims Act, which provided the government with a vehicle by which it could recover the value of the contract when faced with non-conforming goods.
Today, the False Claims Act has expanded significantly, allowing the government to reach fraud in the healthcare industry, mishandling of grant money, and even fraud with student loans and for-profit universities. However, the underlying need for the False Claims Act to combat fraud against the U.S. military lives on, and a Colorado-based defense contractor recently settled a fraud case with the Department of Defense for $10 million.
Details of the case against First RF Corp.
Fraud under a defense contract can be deadly – unnecessarily placing U.S. service members at risk of harm or exposure to enemy combatants. In the case against First RF Corp, the allegations involve misrepresentations and inflated prices with regard to certain components of Improvised Explosive Devices (IED’s). More specifically, the Department of Justice alleges that First RF Corp. misrepresented the costs of manufacturing and providing electronic warfare antennas, leading the government to overspend for this product. The contract was initiated in 2005, and since then has allowed First RF Corp. the exclusive opportunity to provide the U.S. Army with electronic warfare systems for use by troops in Iraq and Afghanistan. After a thorough investigation, the U.S. Attorney’s Office for the District of Colorado and the Defense Criminal Investigative Service determined that the company had inflated and misrepresented the costs to manufacture certain antennas, thereby inflating the price for the entire system in violation of the False Claims Act.
As always, the Department of Justice was pleased to resolve the matter and redistribute funds taken fraudulently from U.S. taxpayers. According to U.S. District Attorney John Walsh, “When defense contractors supply our armed forces with equipment, those contractors must be absolutely truthful in their price negotiations….It is no excuse for dishonesty that the military equipment was urgently needed. Defense contractors that fail to act with integrity in such negotiations should know that they will face consequences.”
The U.S. Army’s criminal investigation unit also commented, remarking: “Our men and women in uniform are putting their lives on the line daily around the world, and the U.S. Army relies heavily on the contracting process to bring the very best to our service men and women….Shortchanging our troops or the American taxpayers in any way, shape, or form will not be tolerated and we are committed to investigating all allegations of possible fraud or misrepresentation of costs with great interest.”
Contact Berger Montague today
If you are aware of fraud under a government contract and would like to discuss your information with a confidential whistleblower attorney, please contact our office today. We have extensive experience handling defense contract fraud and encourage you to make an appointment today!