Defense Contractor Agrees to Pay $9.2 Million to Settle False Billing Allegations

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. Under 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.”

“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, who also noted three earlier guilty pleas in a related criminal matter in the Southern District of Mississippi. Two individuals pleaded guilty in United States v. N. R. Holden & R.G. Gardner, Criminal No 1:15-cr-42 HSO-RHW, and were sentenced in 2015. Another individual pleaded guilty in United States v. R.M. Wilson, Criminal No 1:16-cr-34-LG-RHW, and was sentenced in 2016. According to Acting U.S. Attorney Brittain, “the Southern District of Mississippi will remain vigilant in identifying and prosecuting those involved in nefarious activities and fraudulent billing, which ultimately result in substantial cost overruns on Navy and Coast Guard shipbuilding projects.”

Special Agent in Charge of the Naval Criminal Investigative Service (NCIS) Southeast Field Office, Mike Wiest, says “Corruption, fraud and bribery are not victimless crimes. Overcharging for work not done is not only criminal on its face, investigating those crimes siphoned resources and time which would have been better invested in protecting the nation. Multiple federal agencies spent years investigating this lack of integrity, to help hold accountable those who would squander American taxpayer dollars.”

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