Boeing Agrees to Pay $23 Million to Settle False Claims Act Allegations

The Boeing Company, a preeminent aircraft manufacturer, has agreed to pay $23 million to the federal government amidst allegations of improper invoices for wages on behalf of workers employed at the San Antonio-based Aerospace Support Center. Despite Boeing’s assertions that the false claims were the result of accidental mischarges and not intentional conduct, the aircraft giant opted to settle the allegations set forth by the Department of Justice; however, it has not admitted to any liability in the matter.

The case was commenced by four former and current Boeing employees with first-hand original information about the alleged fraud. According to the Department of Justice’s October 10, 2014 press release, the Boeing aircraft involved in the alleged fraud “is one of the military’s major systems for transporting troops and cargo throughout the world.”

Details of the Allegations Against Boeing

According to the allegations, which were recently disclosed by the Department of Justice, Boeing consistently overcharged the U.S. government for wages and labor pursuant to a contract it held for the repair and maintenance of the C-17 Globemaster aircraft. More specifically, from 2003 through 2007, Boeing is alleged to have billed the government for labor hours contemporaneously for more than one job. Boeing is also alleged to have charged the government for labor hours completed after a job had concluded, charged hours to the wrong job, and billed hours at a higher rate for maintenance work when, in reality, the time was being spent on non-chargeable work or work billed at a lower rate. In addition, the government alleges that certain Boeing contractors billed for time spent in meetings that were not directly related – or related at all – to the contract for maintenance on the C-17 Globemaster.

According to a spokesperson for the four whistleblowers in the case, “It’s a labor mischarging case….They overbilled the government by shifting expenses to other contract areas they shouldn’t have … all of it resulting in (Boeing) getting more money.”

The four whistleblowers responsible for exposing the alleged fraud are set to split a reward of $3.91 million.

Government’s Response

In keeping with its dedication to eliminating costly and wasteful false claims under government contracts, the Department of Justice commented on the matter, remarking: “Defense contractors are required to obey strict accounting standards when submitting billing for work performed on government contracts….The pursuit and favorable settlement of this civil litigation was the result of effective teamwork between the Justice Department and the investigative agencies.”

The case was concluded after a valiant investigative effort involving the U.S. Attorney’s Office for the Western District of Texas, the Defense Criminal Investigative Service, the Air Force Office of Special Investigations, the Defense Contract Audit Agency, and the Defense Contract Management Agency.

Contact Berger Montague Today

If you are aware of potential fraud under a government contract – particularly a contract for defense work with any of the branches of the U.S. military – we encourage you to contact our office today for more information about how you can initiate a False Claims Act lawsuit.