Defense Contract Fraud Cases

The United States defense budget has risen to a record level of over $650 billion a year. It is one of the largest annual expenditures by the federal government. This explains why many False Claims Act and qui tam cases are directed against defense contractors.

KBR is Named in Majority of Iraq Frauds

April Stephenson, head of the Pentagon's contract audit agency, says Kellog Brown and Root (KBR) is named in the "vast majority" of 32 cases referred by government auditors for criminal investigation. She told the Wartime Contracting Commission that in the agency's history, "I don't think we are aware of a program, a contract or a contractor that's had this number" of referrals. | May 5, 2009

Northrop to Pay $325 Million in Satellite Case

Northrop Grumman has agreed to pay $325 million to settle a False Claims Act lawsuit that alleged TRW (now owned by Northrop) made defective parts for spy satellites that resulted in serious malfunctions and expensive fixes, all charged to U.S. taxpayers. The Northrop settlement is the largest military-procurement fraud whistleblower case to date, and was brought by Robert Ferro, an Aerospace Corp. official who first discovered the problem in 1995 and brought it to TRW's attention. The problem went uncorrected and satellites failed. When TRW engaged in a cover up, Mr. Ferro decided to blow the whistle, and he will be awarded $48.7 million for his work, and the work of his attorneys, in bringing the case. | April 10, 2009

Katrina Case Reinstated

The U.S. Fifth Circuit Court of Appeals has reinstated a New Orleans whistleblower lawsuit against insurers that allegedly overbilled the National Flood Insurance Program after Hurricane Katrina. The lawsuit, by Branch Consultants, was dismissed in October of 2007 on the grounds that its core allegations were already covered by a rival whistleblower suit in Mississippi. | Feb. 24, 2009

$52 Million for Bad Blades

Pratt & Whitney and PCC Airfoils have agreed to pay $52 million to settle allegations they knowingly sold defective turbines for fighter jets. | Nov. 21, 2008

Pratt to Pay $52 Million

Pratt & Whitney and a subcontractor have agreed to pay more than $52 million to settle False Claims Act charges the company knowingly sold defective turbine blades for F-15 and F-16 fighter jet engines used by the Air Force. | Aug. 6, 2008

Conflict of Interest FCA

Science Applications International Corporation (SAIC) was found guilty of violating the False Claims Act and breaching a contract with the Nuclear Regulatory Commission. The federal jury awarded the U.S. $5.91 million under the False Claims Act with additional penalties of between $5,000 and $10,000 for each of 77 false claims and statements. The case is the first conflict of interest claim under the FCA. |Aug. 6, 2008

Faulty Flares Ignite Lawsuit

The Dept. of Justice has joined a whistleblower lawsuit alleging that ATK Thiokol Inc. made defective battlefield flares that can ignite if dropped from a height of as low as 3 feet. The defective flares cost from $700 to $1,000 each, and the U.S. Army and Air Force paid ATK more than $100 million for the product. | June 26, 2007

This information is for educational purposes. It is not offered as and does not constitute legal advice or legal opinions. You should not act or rely upon this information without seeking the advice of an attorney.