The Justice Department said Thursday that Navistar Defense must pay $50 million in response to a claim that the company defrauded the Marine Corps in a contract modification that inflated prices for a suspension system for armored vehicles used in Afghanistan.
In Afghanistan’s rough, mountainous terrain, where roadside bombs have killed and maimed thousands of American soldiers, the Illinois-based company was producing a vehicle designed to protect troops against those weapons. To make a higher profit on that vehicle, Navistar created fraudulent sales documents with inflated prices that it presented to Defense Department officials. The Marine Corps relied on the fraudulent data when it agreed to the contract modification to purchase needed suspension parts for the Mine-Resistant Ambush Protected vehicles.
The Justice Department found that Navistar officials made up the prices and looted taxpayers.
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“We expect those doing business with the government to be truthful and transparent,” acting Assistant Attorney General Brian Boynton said in a Justice Department statement.
“The settlement evidences our commitment to go after any contractor who treats America’s dedication to our troops as a get-rich-quick scheme at the expense of the taxpayer and the safety of our military personnel,” acting U.S. Attorney for the District of Columbia Channing Phillips added.
The Justice Department’s Civil Division began the investigation after receiving a whistleblower complaint.
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The Justice Department worked with the U.S. Attorney’s Office for the District of Columbia and several DOD offices, including the Army’s Major Procurement Fraud Unit and the Defense Contract Audit Agency.
The civil settlement resolves the claims brought by Duquoin Burgess, a former government contracts manager for Navistar. For his role, Burgess will receive more than $11 million from the settlement.
