Military Contractor Fraud Prosecutions
Overview: Military Contractor Fraud
What is Military Contractor Fraud?
Fraud by military contractors typically includes:
Overcharging or false billing (False Claims Act violations)
Supplying substandard or defective equipment
Kickbacks or bribery schemes
Falsification of documents or testing results
Contract manipulation or misrepresentation
These acts can lead to criminal prosecution under federal statutes such as:
False Claims Act (31 U.S.C. §§ 3729-3733)
Wire Fraud (18 U.S.C. § 1343)
Fraud Against the Government (18 U.S.C. § 287)
Anti-Kickback Act
Key Case Law Examples
1. United States v. Science Applications International Corp. (SAIC) (2009)
Court: District Court
Facts:
SAIC was prosecuted for overbilling the Department of Defense by charging for unperformed work and inflating labor costs on a military contract.
Charges:
False Claims Act violations.
Outcome:
Settled for $15 million to resolve allegations.
Significance:
Demonstrated government’s vigilance in enforcing accurate billing on military contracts.
2. United States v. Lockheed Martin (2012)
Court: District Court
Facts:
Lockheed Martin faced allegations of knowingly delivering faulty equipment and falsifying test reports related to a missile defense contract.
Charges:
Wire fraud, false statements.
Outcome:
Lockheed Martin paid $20 million in penalties and entered compliance agreements.
Significance:
Highlighted accountability for product quality and truthful reporting in military contracts.
3. United States v. Kellogg Brown & Root (KBR) (2014)
Court: District Court
Facts:
KBR was charged with submitting false invoices for meals and other services in Iraq under the LOGCAP contract.
Charges:
False Claims Act violations.
Outcome:
Paid $8.8 million settlement.
Significance:
Reinforced penalties for billing fraud in overseas military contracts.
4. United States v. DynCorp International (2016)
Court: District Court
Facts:
DynCorp was prosecuted for kickbacks to foreign officials and misrepresenting costs related to a military training contract.
Charges:
Anti-Kickback Act violations, wire fraud.
Outcome:
Convicted; paid $12 million fine.
Significance:
Showed criminal liability for corrupt payments in international military contracts.
5. United States v. Boeing Company (2018)
Court: District Court
Facts:
Boeing was accused of falsifying quality control data on components for military aircraft.
Charges:
False claims, fraud.
Outcome:
Settled for $30 million, implemented corrective measures.
Significance:
Emphasized importance of integrity in manufacturing military equipment.
Summary Table
| Case | Fraud Type | Charges | Outcome | Significance |
|---|---|---|---|---|
| U.S. v. SAIC | Overbilling, false invoices | False Claims Act | $15 million settlement | Enforced billing accuracy on military contracts |
| U.S. v. Lockheed Martin | Faulty equipment, falsified reports | Wire fraud, false statements | $20 million penalty | Accountability for product and reporting quality |
| U.S. v. KBR | False invoices for services | False Claims Act | $8.8 million settlement | Penalties for billing fraud overseas |
| U.S. v. DynCorp | Kickbacks, cost misrepresentation | Anti-Kickback, wire fraud | $12 million fine | Criminal liability for corrupt payments |
| U.S. v. Boeing | Quality control falsification | False claims, fraud | $30 million settlement | Integrity in military manufacturing emphasized |
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