Department of Justice Seal


TUESDAY, MARCH 10, 1998 (202) 616-2765

TDD (202) 514-1888

WASHINGTON, D.C. -- A Bethesda, Maryland, consulting company has paid the United States $425,000 to settle allegations it defrauded the government by knowingly charging false labor costs to numerous federal contracts, the Department of Justice announced today.

Assistant Attorney General Frank Hunger of the Civil Division said the settlement resolves claims against the Washington Consulting Group in a lawsuit first filed by Ellen Werther, a former WCG employee under the qui tam provisions of the False Claims Act in U.S. District Court in Alexandria, Va. The court dismissed the suit last week after the parties negotiated a settlement.

"Contractors who win federal work should understand that we will not tolerate attempts to defraud the government," said Hunger. "The Department will investigate and prosecute those who attempt to obtain federal dollars by submitting false information."

According to the suit, WCG employees altered time sheets to show that work performed on various contracts and orders was performed under federal contracts when in fact the work was not done under those contracts. In addition, employees allegedly billed the federal government for unallowable costs.

WCG performed such work for federal agencies as computer related design; writing, editing and publishing statistical and technical reports; and preparing audio-visual material. Although labor charges to WCG's contracts with seven different federal entities were at issue in the case, most of WCG's work last year was done for the Federal Aviation Administration.

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 Department intervenes and successfully prosecutes the case. Werther and her attorneys will receive $93,500, which includes both the realtor's share and attorney's fees.

The case was investigated by the Defense Contract Audit Agency and the Department of Energy's Office of Inspector General in conjunction with Department's Civil Division, which also negotiated the settlement.