Boeing pays $4M for overbilling DOD

PHILADELPHIA -- The U.S. Attorney for the Eastern District of Pennsylvania announced January 20 that The Boeing Company will pay the United States nearly $4.4 million and make several procedural changes to resolve an overbilling of the Department of Defense for work at its Ridley Park facility.

Beginning in 2003, the DOD awarded Boeing contracts to produce and modify Chinook helicopters. More than 100 new Chinooks were ordered, and Boeing also agreed to "remanufacture" several hundred older Chinook helicopters by overhauling their airframes to accommodate upgrades of the helicopter's avionics and engines.  The Ridley Park plant is the principal site where this work is performed. A whistleblower employee at Boeing informed the government that several managers instructed the mechanics assigned to the Chinook program to perform other, non-billable work while separately billing DOD for their time, resulting in the United States being charged for work for which it had already paid.

The whistleblower brought the fraudulent billing scheme to the government's attention by filing a qui tam lawsuit under the False Claims Act. This act makes it illegal for any person or entity to present a false or fraudulent claim to the United States for payment and/or to retain overpayments that were improperly received. The investigation did not reveal any quality-related problems or impediments to military efforts from this fraud.

Boeing cooperated with the investigation. Over the next few years, Boeing will also implement new procedures for its defense manufacturing facilities nationwide. It has agreed to implement similar technological measures where appropriate to help ensure that a similar problem does not occur at other facilities.

“The False Claims Act was originally passed to combat defense procurement fraud,” United States Attorney Zane David Memeger said. “It remains a critical weapon in the Department of Justice's battle to ensure that every taxpayer dollar is spent as efficiently and honestly as possible.  The Department of Justice and United States Attorney's Offices across the country are committed to rooting out frauds like this one, to recouping the taxpayers' money, and to putting in place the mechanisms necessary to ensure that the offender will not commit such a fraud again.”

Memeger complimented the whistleblower for coming forward.

“Some of the most important cases begin with a citizen who sees something wrong and speaks up. Whistleblowers who notify the government of possible fraud allow us both to correct that specific problem and to prevent similar misconduct from recurring in the future," Memeger said. "Everyone benefits from cooperation between the government and an active, alert community."

“This settlement is an example of the teamwork amongst Special Agents of the Major Procurement Fraud Unit, U.S. Army Criminal Investigation Command, the Defense Criminal Investigative Service, and the U.S. Attorney's Office, who continue to protect and safeguard our tax dollars by pursing justice through civil remedies,” said Director James K. Podolak of the Army Criminal Investigation Division’s Major Procurement Fraud Unit (MPFU). “MPFU will continue to protect the interest of our tax dollars by continuing to work jointly with our law enforcement partners.”

“The misuse of U.S. taxpayer monies by Defense contractors corrupts our acquisition infrastructure,” said Special Agent-in-Charge Edward T. Bradley with the Defense Criminal Investigative Service. “Investigating false claims for work on our critical military equipment remains an operational priority for the Defense Criminal Investigative Service. DCIS will continue to pursue violations of the False Claims Act with the assistance of our partner agencies to ensure the well-being of our U.S. military and proper stewardship of acquisition funds.”