Bering Straits Technical Services LLC, False Claims Act Violations, Texas 2016

Feds Crack Down on Contractors

HOUSTON – Bering Straits Technical Services LLC (BSTS) and its parent company, Bering Straits Native Corporation (BSNC), have paid $2 million in damages to resolve numerous alleged violations of the False Claims Act, announced U.S. Attorney Kenneth Magidson. The settlement was finalized April 26, 2016, without an admission of liability.

“Yesterday’s settlement should serve as a reminder to government contractors of their accountability to the public,” said Magidson. “The citizens of this district should be reassured that the Department of Justice and law enforcement are doing all they can to ensure taxpayer money is spent appropriately. I encourage those who are knowledgeable about fraudulent practices against the government to come forward and report wrongdoing.”

“Contractors are expected to comply with their statutory obligations and act in good faith when dealing with the U.S. government,” said Special Agent in Charge Janice M. Flores of the Defense Criminal Investigative Service (DCIS), Southwest Field Office. “The DCIS is committed to working with its partner agencies, such as DOJ, Defense Contract Audit Agency (DCAA) and the U.S. Army Criminal Investigation Command (CID) to ensure integrity of the Defense Department’s procurement process. This settlement demonstrates that combatting fraud, waste and abuse within Department of Defense contracting remains a top priority.”

The settlement is the result of a whistleblower suit filed under seal in Houston federal court on Feb. 3, 2012. The suit alleged that BSTS and BSNC caused false claims to be submitted to DOD and/or the Defense Logistics Agency (DLA) for maintenance facility services provided at the Red River Army Depot located near Texarkana.

Specifically, the whistleblower alleged that beginning in September 2010, BSTS and BSNC submitted false preventative maintenance reports for maintenance that was not performed and false repair work orders, thereby overcharging the government. Employees were allegedly coerced to “pencil whip,” that is, make up hours after the fact with no relation to time actually spent on the maintenance.

Under the federal False Claims Act, a whistleblower, known as the relator, is entitled to share in the government’s monetary recovery under certain conditions. The settlement was a result of joint investigation by DCIS, DCAA, U.S. Army CID and DOJ. Assistant U.S. Attorney Jill Venezia handled the matter for the United States.

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