Military vehicles maker Navistar Defense pays $50 million to settle whistleblower False Claims Act case for false sales histories

Military vehicles manufacturer, Navistar Defense LLC (Navistar), will pay $50 million to resolve a whistleblower case in which it was revealed  that it fraudulently induced the U.S. Marine Corps to enter into a contract modification at inflated prices for a suspension system for armored vehicles known as Mine-Resistant Ambush Protected vehicles. During negotiations, Navistar was asked to provide sales information on the contract parts to examine the reasonableness of Navistar’s proposed prices. The United States alleged that Navistar knowingly created fraudulent commercial sales invoices and submitted them to the government to justify the company’s prices. The sales written in the commercial sales invoices never occurred. The government relied on the fraudulent sales invoices in agreeing to Navistar’s inflated prices.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Duquoin Burgess, a former Government Contracts Manager for Navistar. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned U.S. ex rel. Burgess v. Navistar Defense, LLCet al., No. 13-cv-1463 (D.D.C). Burgess, the whistleblower, will receive $11,600,000 out of the settlement.