Boeing agrees to $18 million settlement to resolve False Claims Act allegations brought by whistleblower

posted on:
October 27, 2015

Lance Gould

On Oct. 14, 2015, the Justice Department announced that Boeing has agreed to pay $18 million to settle alleged Federal False Claims Act violations. The allegations were that Boeing, a company in the aerospace and defense industry, submitted false claims for labor charges on its maintenance contract with the U.S. Air Force. Boeing had a contract to perform maintenance and repair on C-17 Globemaster aircraft, which is the Air Force’s major system for carrying troops and cargo throughout the world.

The allegation was that Boeing knowingly charged the government for time that Boeing’s mechanics spent on extended breaks and lunch hours, instead of repairing the aircraft. There are rules in place that contractors must follow when billing the government for work performed on government contracts. Repairing the aircraft is a chargeable time, whereas a long lunch or extended break is not.

Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division stated, “Today’s settlement demonstrates that the Justice Department will ensure that government contractors meet their obligations and charge the government appropriately.”

This case was brought under the qui tam provision of the Federal False Claims Act, which is a whistleblower provision to incentivize taxpayers to report fraud to the government. The incentives include allowing the whistleblower to recover 15-30 percent of the funds recovered. The whistleblower in this case, James Thomas Webb, a former employee of Boeing, was permitted to bring the suit because the Federal False Claims Act allows private individuals to sue on behalf of the government.

The whistleblower provision has helped the government to (1) detect more fraud, (2) ensure taxpayer money intended for maintenance and repair of government property, including aircraft in this case, is used for that purpose, and (3) deter other defense contracting companies from committing the same fraud.

If you are aware of fraud being committed against the federal or state governments, you could be rewarded for reporting the fraud. If you have any questions about whether you qualify as a whistleblower, please contact an attorney at Beasley Allen for a free and confidential evaluation of your claim. There is a contact form on this website, or you may email one of the lawyers on our whistleblower litigation team: Andrew Brashier, Archie Grubb, Larry Golston, or Lance Gould.

Source: U.S. Department of Justice

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