In a shocking case of corporate greed, Huntington Ingalls Industries Inc. (HII), a publicly traded company headquartered in Newport, Virginia, has agreed to a $9.2 million settlement of allegations that it violated the False Claims Act by knowingly overbilling the government for labor on U.S. Navy and Coast Guard ships at its shipyards in Pascagoula, Mississippi.
According to the settlement, HII will make a payment of $7.9 million, which, combined with earlier repayments, will result in the settlement recovery of approximately $9.2 million.
“Contractors that knowingly bill the government in violation of contract terms will face serious consequences,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “This settlement demonstrates, once again, that we will not tolerate defense contractors who falsely charge the armed forces or any agency of the United States.”
The civil settlement resolves alleged labor mischarging on various U.S. Navy and Coast Guard contracts dating back to 2003. HII allegedly mischarged labor incurred on particular contracts to other contracts, even though the costs were not actually incurred by those contracts.
The labor mischarging allegations resolved by the settlement were originally raised in a lawsuit brought by Bryon Faulkner, a former HII employee, under the qui tam, or whistleblower, provisions of the False Claims Act.
“Our Armed Forces depend on defense contractors to follow the rules, and this civil settlement, the second largest in the District’s history, should remind all those who conduct business with the United States Government that they are expected to abide by the rules,” said Acting U.S. Attorney Harold Brittain.
Huntington Ingalls Industries Inc.
Defendant: Huntington Ingalls Industries Inc.
Criminal Charges: Violation of the False Claims Act
City and State: Newport, Virginia
Date: N/A (settlement)
Sentence or Outcome: $9.2 million settlement
Dollar Amounts: $7.9 million payment, $9.2 million settlement recovery
Key Facts
- State: Virginia
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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