FOR IMMEDIATE RELEASE CIV
THURSDAY, MARCH 12, 1998 (202) 616-2765
TDD (202) 514-1888
DEFENSE CONTRACTOR WILL PAY U.S. $2.2 MILLION TO SETTLE ALLEGATIONS IT OVER CHARGED ARMY ON HELICOPTER CONTRACT
WASHINGTON, D.C. -- A Florida defense contractor will pay
the federal government $2.2 million to settle allegations it
defrauded the United States by overcharging the Department of the Army for air filters for the AH-1 "Cobra" helicopter, the Department of Justice announced today.
Assistant Attorney General Frank Hunger of the Civil Division said the settlement resolves charges brought against Pall Aeropower Corporation, formerly known as Pall Land and Marine Corporation, of New Port Richey, Florida. A former Pall manager, Vern Sneed, filed the suit initially under the qui tam provision of the False Claims Act in U.S. District Court in Tampa, Florida, in 1993. The court unsealed the settlement Friday.
The complaint alleged that Pall, while negotiating with the Army, did not tell Army negotiators about manufacturing changes it intended to make in producing the filters that significantly reduced their cost. Federal law required Pall to disclose that information to the government.
Sneed's suit alleged that Pall's intentional suppression of that information allowed it to keep all of the savings the new manufacturing process generated and earn a larger profit on the contract. The Army would have shared in those savings through a lower contract price.
Sneed also alleged that Pall defrauded the Department of Defense on other contracts. The settlement dismisses all of Sneed's allegations.
"Federal regulations require all contractors to be truthful and honest in their dealings with the government," said Hunger. "The Department will investigate and prosecute cases in which there are allegations contractors were not forthright and above board."
Under the settlement, Sneed will receive $374,000 for bringing the matter to the attention to the government. Under the qui tam provisions, a private party can file an action on behalf of the United States and receive a portion of the settlement if the government takes over the case and prosecutes it successfully.
The case was investigated by the Army Criminal Investigative Command, with assistance from the Department of Defense's Criminal Investigative Service. The Civil Division negotiated the settlement.