A federal court in Dallas, Texas has awarded two whistleblowers and the U.S. Government more than $40 million against a sub-contractor who was accused of submitting false claims under a government contract.
This is a major victory for the former employees who blew the whistle on the false claims. Under the False Claims Act, they will be entitled to a reward equal to between 15% and 25% of the amount the government actually recovers under the False Claims Act. That could mean a payday of between $6 million and $10 million if the government recovers the full amount of the judgment.
The sub-contractor was a distributor of cutting tools to the aerospace industry. It sold cutting tools and tooling kits to aerospace contractors of the United States, including Lockheed Martin Corporation.
The whistleblowers alleged that the sub-contractor and its former President fraudulently inflated charges that were submitted to Lockheed Martin and then passed on to the United States government.
The judgment was entered against the sub-contractor's former President, who is currently serving a 7½ year prison sentence after pleading guilty to conspiracy to defraud the government. The amount of $40 million was arrived at by taking the government’s actual damages and multiplying by three in accordance with the treble damages provision of the False Claims Act.
If you are aware of false claims being submitted to the government -- whether directly or indirectly -- you should consult with an experienced lawyer immediately. To schedule a free and confidential consultation by telephone or in person, call my office today at (212) 601-2728.
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