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Justice News

Department of Justice
U.S. Attorney’s Office
District of Maryland

FOR IMMEDIATE RELEASE
Tuesday, December 21, 2021

Information Technology Contractor Agrees to Pay More Than $1.3 Million to Settle Federal False Claims Act Allegations of Overbilling

Baltimore, Maryland – Virginia-based Telophase Corporation (“Telophase”) has agreed to pay the United States $1,389,509 million dollars to resolve federal False Claims Act allegations that it overbilled the National Aeronautics and Space Administration (“NASA”) for labor hours worked and for labor rates and costs in excess of those actually incurred.  

The civil settlement was announced by United States Attorney for the District of Maryland Erek L. Barron, and Assistant Inspector General for Investigations (AIGI) Robert Steinau of NASA’s Office of Inspector General.  

“Federal contractors are required to bill for costs actually incurred, and to be truthful in the claims they submit to federal agencies,” said U.S. Attorney Erek L. Barron.  “Companies that submit false bills to the government must be held accountable.”

“The NASA Office of Inspector General is proud of the exceptional work from our agents and partnership with the United States Attorney, District of Maryland in aggressively investigating these allegations,” said AIGI Steinau.  It is through these partnerships that we will continue to pursue and hold those accountable that attempt to defraud NASA.”

Telophase is a provider of information technology and cyber-security services, operations engineering for monitoring tools and automation, quality and compliance management, environmental engineering, and education and training initiatives to both the public and commercial sectors.  Telophase was awarded a Cost-Plus Fixed-Fee (“CPFF”) subcontract for services to be provided to the Applied Engineering and Technology Directorate of NASA’s Goddard Space Flight Center.  This contract type reimburses the contractor for actual project costs, plus a fee. 

The settlement resolves allegations that, between April 1, 2016 through December 31, 2018, Telophase caused the submission of false claims to NASA by billing NASA for: labor hours in excess of the hours that Telophase could demonstrate that its employees and contractors actually worked; labor rates higher than the rates actually paid to its employees and contractors; labor costs in excess of Telophase’s actual recorded costs; and indirect rates that were higher than those actually incurred.   

The claims resolved by this settlement are allegations.  The settlement is not an admission of liability by Telophase, nor a concession by the United States that its claim is not well founded.   

United States Attorney Erek L. Barron commended NASA’s Office Investigations for its work in the investigation.  Mr. Barron thanked Assistant U.S. Attorney Tarra DeShields who handled this case.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit https://www.justice.gov/usao-md/affirmative-civil-enforcement and https://www.justice.gov/usao-md.  

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Topic(s): 
False Claims Act
Component(s): 
Contact: 
Marcia Murphy (410) 209-4854
Updated December 23, 2021