Lockheed Martin to Pay Government $4.4 Million After Providing Faulty Equipment

israel-palacio-463979-copy-300x200While qui tam cases brought under the False Claims Act (FCA) are often related to health care, qui tam cases can be in connection to any type of claim made to the federal government for payment. In addition to the health care industry, defense contractors are another area in which the government is vulnerable to fraudulent schemes. For example, Lockheed Martin Corporation has agreed to settle FCA allegations by paying the federal government $4.4 million. Lockheed is accused of providing defective communications systems to the U.S. Coast Guard.

Defective Equipment for the Military

The defense contractor provided Radio Frequency Distribution System (RFDS) for the Coast Guard’s National Security Cutters. According to the U.S. attorneys, the RFDS failed to be able to conduct simultaneous operations, meaning it could receive and transmit different radio signals at the same time without interference.

The government has a contract for nine Cutters. It has taken possession of six and three more are under construction. Lockheed has agreed to pay $2.2 million to repair the cutters and to pay another $2.2 million in fines for the claims made to the government based on defective equipment.

Lockheed Case Arose Through a Whistleblower

The Lockheed case was brought to light by a whistleblower, Stu Rabinowitz, who was a lead member and then principal member of the engineering staff at Lockheed between 2000 and 2012. Rabinowitz was assigned to investigate the RFDS after receiving complaints from the Coast Guard. One crew states the Cutter had difficulty receiving signal from a landing helicopter while it was transmitting another signal. Rabinowitz investigated the situation and reported problems to his superiors, but then he was laid off by the company.

Because Rabinowitz’s suit was successfully settled by the government, he will receive $990,000 from the settlement.

Department of Defense Recoveries

The DOD is often part of FCA claims. In 2017, there were 28 new qui tam matters and 19 new non-qui tam cases. The qui tam cases in which the U.S. intervened led to a $208,599,712 recovery, qui tam cases where the U.S. did not intervene resulted in a $500,000 recovery, and non-qui tam cases resulted in $10,900,000 recovery. This was significantly more than in 2016, when the government recovered $122,279,365 in total. However, the highest recovery related to the DOD since 1987 occurred in 2006, when the U.S. recovered $640,550,806.

Are You Aware of a Fraud Scheme Related to the Military?

If you work for a government contractor in California and you believe the company is fraudulently billing the government for defective or substandard equipment, or is intentionally overcharging the government, contact a San Francisco qui tam lawyer today. Being a whistleblower can be intimidating, and it can take years for your case to be resolved. However, coming forward may be necessary to safeguard the lives of active service members.

To discuss the information you have and your legal rights and options, call Brod Law Firm (800) 427-7020 and schedule a free consultation.

(image courtesy of Israel Palacio)