Defense Contractor Navistar Defense, LLC Agrees to Pay $50 Million Settlement to Resolve False Invoice Allegations

On May 27, 2021, Navistar Defense LLC (Navistar) agreed to pay $50 million to settle allegations that it violated the False Claims Act by providing falsely inflated prices for the suspension system of a type of armored vehicle known as a Mine-Resistant Ambush Protected Vehicle.

The allegations, originally filed in 2013 and unsealed in December 2019, alleged that the United States relied on false claims made by Navistar when the United States agreed to a falsely inflated price.  The Complaint alleged Navistar was aware the agreement was contingent on proof of reasonable price for the independent suspension system.  However, Navistar never sold any of the new parts at issue, and were unable to provide actual sales as requested by the Government.  Instead, Navistar is alleged to have provided the sales numbers of different parts.  This false representation led the Government to believe Navistar had submitted accurate sales information, as required by the contract.

The suit was brought under the qui tam provisions of the False Claims Act, which allows private individuals or entities to bring suits on behalf of the government and collect a portion of the damages for their service as a whistleblower.  In this case, the qui tam plaintiff was Duquoin Burgess, a former Government Contracts Manager for Navistar from 2006 and 2012.   Mr. Burgess will receive $11,060,000 from the settlement.

“Fraud is not a victimless crime,” said Special Agent in Charge Thomas Cannizzo of the Naval Criminal Investigative Service (NCIS), Southeast Field Office in the press release. “It steals money from American taxpayers, damages the integrity of the Department of the Navy procurement process, degrades the readiness of the services by compromising the quality of goods and services used to protect the nation, and squanders more money through the funding of criminal investigations which could have been avoided simply by individuals doing the right thing. NCIS will continue to work with our partner agencies to aggressively pursue those who perpetrate financial crimes.”

Frohsin Barger & Walthall would like to congratulate Mr. Burgess and his counsel for bringing this action and returning funds to the American taxpayer.  Mr. Burgess was represented by H. Vincent McKnight, Jr., of Sanford Heisler Sharp, LLP’s Washington, D.C. Office and co-chair of the firm’s whistleblower practice.

For more information, please see the DoJ press release. 

For more information about the False Claims Act, contact Frohsin Barger & Walthall