Defense Contractor Agrees to Pay $4.63 Million to Settle Overcharging Allegations

ATLANTA - The United States Attorney’s Office announced that L-3 Communications Corporation, Vertex Aerospace LLC and L-3 Communications Integrated Systems LP (collectively L-3) have agreed to pay $4.63 million to resolve allegations that they inflated labor hours for time spent by independent contractors at the military’s Continental U.S. Replacement Centers (CRC) in Fort Benning, Georgia, and Fort Bliss, Texas, preparing to deploy to overseas posts to support U.S. military operations abroad.  The CRCs prepare individuals for deployment by providing orientation briefings, training, health screenings, payroll processing and addressing other administrative matters.       

“Contractors owe a duty to the taxpayers to accurately bill the United States for the actual work performed,” said U.S. Attorney John Horn. “This settlement demonstrates our commitment to hold contractors accountable for false billing and restore wrongfully taken funds to the military.”

“The Justice Department is committed to vigorously pursuing all those who knowingly submit false claims under government contracts,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Contractors that seek taxpayer funds must be scrupulous in their billing, and invoice only for work and amounts permitted by their contracts.” 

L-3 performed rotary aviation maintenance and support services for the U.S. Army in Afghanistan, Iraq, Egypt and Kuwait under contracts with the U.S. Air Force.  The United States alleges that from 2006 through November 2011, L-3 knowingly overcharged the government for time their independent contractors spent at the CRCs by billing for each individual not based on the actual time that individual spent at the CRC, but based instead on the earliest arrival or latest departure time of any other individual who also processed through the center that same day.  

“This collaborative investigative effort reflects the Defense Criminal Investigative Service’s commitment to protecting American taxpayers’ interests by ensuring integrity and accountability throughout the Defense contracting system,” said John F. Khin, Special Agent in Charge, DCIS-Southeast Field Office.

“This settlement is a testament to the hard work of our special agents and also highlights the importance of the whistleblower provision of the False Claims Act,” said Director Frank Robey of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit.  “In this particular case, a concerned citizen wasn’t afraid to speak up, alerted the proper authorities, and helped save the U.S. government millions of dollars.”

The allegations settled arose from a lawsuit filed by a whistleblower, Robert A. Martin, a former L-3 independent contractor, under the qui tam provisions of the False Claims Act.  Under the act, private citizens can bring suit on behalf of the government for false claims and share in any recovery.  Mr. Martin will receive $798,675 from the recovery announced.

This case was investigated by Special Agents of the Defense Criminal Investigative Service and U.S. Department of the Army Criminal Investigation Command’s Major Procurement Fraud Unit, with assistance from the Defense Contract Audit Agency. The civil settlement was reached by Assistant United States Attorney Christopher J. Huber and Trial Attorneys from the Department of Justice Civil Division’s Commercial Litigation Branch.

The lawsuit is captioned United States ex rel. Martin v. L-3 Communications Corp., et al., 1:10-CV-1622-CAP (N.D. Ga.). The claims resolved by the settlement are allegations only; there has been no determination of liability.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016.  The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.