A whistleblower lawsuit seeking more than $1 billion in damages from government contractor Navistar Defense LLC has won the support of the U.S. government.

Whistleblower Duquoin Burgess, a former government contracts manager for Navistar Defense, filed the False Claims Act lawsuit on behalf of the U.S. government, alleging the company vastly overcharged the U.S. Marine Corps for suspension modifications on thousands of Mine-Resistant Ambush-Protected (MRAP) vehicles.

According to the whistleblower complaint, Navistar provided 4,000 MRAP vehicles to the U.S. Marine Corps in 2007 for use in Iraq. In 2009, when the focus of the war effort transitioned to Afghanistan, the Marine Corps needed to upgrade the suspension system on the MRAP vehicles to be better equipped to handle Afghanistan’s rough terrain. The original suspensions were made for Iraq’s paved roads and relatively smooth desert surfaces.

While negotiating the contract for the suspension changes, the Marine Corps asked Navistar to provide evidence of prior sales suspension system parts to ensure that the company’s charges were fair and reasonable. But according to the U.S. Department of Justice (DOJ), the whistleblower complaint asserts that Navistar produced bogus invoices falsely showing prior, comparable sales, along with fabricated catalog prices and other false documents.

Navistar submitted fraudulent invoices for “sales that never occurred” to cover up the “wildly” inflated prices it was charging the Marine Corps, the whistleblower lawsuit alleges.

The complaint alleges the Lisle, Illinois-based company and its executives, including its president and vice president, knew of the fraud. The DOJ estimates Navistar’s scheme cost taxpayers $1.28 billion.

The DOJ investigated the whistleblower’s claims, as it is obligated to do in False Claims Act cases, and chose to intervene, meaning the government will be actively involved in litigation. Although False Claims Act cases can proceed without the government’s active participation, an intervention drastically increases the success of the case. In fact, 95% of False Claims Act cases brought by whistleblowers result in a successful recovery when the government intervenes.

Whistleblowers whose False Claims Act cases lead to a recovery receive 15% to 25% of the total judgment or settlement as their award, or as much as 30% in cases that proceed without the government’s intervention.

“Through rigorous enforcement of the False Claims Act, we protect taxpayer dollars from waste, fraud, and abuse,” said U.S. Attorney Jessie K. Liu for the District of Columbia. “We expect the utmost integrity and reliability from the contractors that design and build equipment that is meant to ensure that our men and women in uniform are adequately protected as they serve our country.”

Beasley Allen has an experienced group of lawyers dedicated to handling whistleblower cases. Lawyers on our whistleblower litigation team are Larry Golston, Lance Gould, Paul Evans, Leslie Pescia, Leon Hampton, Tyner Helms and Lauren Miles.

Additional source: Chicago Business Journal

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