Government Contract Fraud

Over the years, the government has outsourced many of its work to private companies. These government contracts are quite lucrative and are offered in a wide variety of fields. Private companies get government contracts for things such as collecting back taxes or providing military security overseas. Due to the fact that government contracts have increased over the years, there has been a greater incidence of government contract fraud. If you are an employee with knowledge of a government contract fraud, do not be afraid to come forward. With the help of knowledgeable Qui Tam lawyers, you will be able to successfully navigate the process of filing a Qui Tam complaint.

Florida Government Contract Fraud Attorneys

Many times, employees or private citizens can face retaliation when they file a Qui Tam action. Whistleblower laws do exist to protect against retaliation. Contact the lawyers at Levine & Glassman for a free consultation about your Qui Tam case. The lawyers can evaluate your claim to see if it is valid, and then can conduct an investigation and provide the information to the government.

Government Contract Fraud Information Center

• Types of Government Contract Fraud Cases
• Tactics Used to Defraud the Government
• How we can help

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Types of Government Contract Fraud Cases

Government contract fraud deals with overcharging the government for goods or services provided. Any industry that can reasonably have a government contract could have a fraud. The following list of outsourced government contracts typically has the most Qui Tam claims:

• Defense Contracts – More than ever, the military is outsourcing jobs to private companies. Things from accounting to security are being handled by private enterprises. In order to get a defense contract, companies must go through complicated bidding processes. It is a fraud to overcharge the government or provide inflated prices for the defense contracts.

• Healthcare Contracts – Medicare and Medicaid programs are reimbursed by the government. There are several instances of healthcare fraud where hospitals and other healthcare entities overcharge for their services. There is also a significant amount of pharmaceutical fraud in terms of providing the Food and Drug Administration (FDA) with incorrect data in order to put drugs onto the market.

• Environmental Programs – There are several conservation and environmental programs that the government funds with grants and other monies. The government will offer private contracts to companies to carry out the service or conservation projects. The private company needs to comply with all of the environmental rules and regulations the government has set into place. An example of a fraud in an environmental program is a private company requiring the government to make progress payments when there is no actual progress on the project.

• Agricultural Subsidies – In the farming industry it is common to have subsidies. The government can incorrectly pay out millions of dollars in agricultural subsidies. Even though there is an oversight department with all these programs, it takes awhile for the government to recognize which entity is conducting the agricultural subsidy fraud.

• Federal Government Construction – There are numerous federal construction projects contracted to private companies. Usually there is a bidding process and the private company has to provide projections on the cost of building materials, labor and the length of time it will take the company to complete the project. A company will get the contract, and once it starts working charge the government more money for “unforeseen” circumstances. The overcharging results in government construction projects going way over budget.

• Customs Fraud – This fraud can happen when customs agents do not collect the proper taxes and duties required to import and export products from and into the United States. A common example of customs fraud is misclassifying products to avoid or decrease import tariffs. Custom agents can also incorrectly state the country of origin to avoid duties and taxes on certain items. The US government loses millions of dollars due to customs fraud.

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Tactics Used to Defraud the Government

In most cases, the following tactics are used to defraud the government:

• Cross charging – In most defense contracts, there are fixed contract prices and cost plus contract prices. The cost plus contract prices allow the private companies to make a profit on the products and services provided to the government. Usually the fixed contract prices are at cost with no profit margin. However, the fraudulent practice comes in when the company puts fixed cost services and products into the cost plus contract products and services. This “cross-charging” results in overcharging the US government for products and services and constitutes a fraud under the False Claims Act.

• Product substitution – Basically the US government contracts with a private company to receive a certain product at a certain price. The company then replaces the contracted product with a product that is of inferior quality. It is a fraud because the government is not receiving what they paid for, and in most cases the product they do receive costs less than the contract price.

• Improper cost allocation – An example of improper cost allocation is “cross-charging” where the private companies put fixed products and services in the cost plus ledger resulting in the US government to pay over the contract price. Generally improper cost allocation means that the private companies misuse accounting principles in order to charge the US government more money for products and services.

• Failure to comply with contract negotiations – The downside of government contracts when it comes to fraud is the exclusivity and longevity. Especially in terms of defense contracts, the government will deal with only one entity to supply the products and services. Once the private company gets the contract, it is easy for them to start secretly increasing the charges of their products and services. Usually it is not just commercial interests involved, but political interests as well. Contract negotiations can get very complicated and once the government awards a contract to an entity, it takes a long time to discover the fraud. It takes an even longer time to start the bidding process to award the contract to another private company.

• Falsification or alterations of supporting data – Sometimes private companies lie in their proposals and show that they can bring in the project faster and cheaper when in reality the data is fabricated. The government awards the contract based on this false information and has to pay more money because the project budget was incorrect from the beginning.

Some other accounting practices that result in government contract fraud include:

• Failure to update cost or pricing data when past activity indicated price decreases
• Failure to completely disclose information known the contractor personnel
• Distortion of overhead accounts or baseline information by transferring charges or accounts that have a material impact on government contracts
• Non-disclosure of actual costs for follow up contracts
• Failing to disclose internal documents on vender discounts
• Submitting fictitious documents
• Delay in releasing information to government in order to reduce the chance of price reductions.

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How we can help

Government contract fraud wastes millions of dollars of taxpayer and government funds. It is vital to come forward with information about government contract fraud. Those millions of dollars could be used to improve education, healthcare, and military operations. As a whistleblower, you are doing your duty as a responsible citizen and an ethical employee to report wrongdoing that defrauds the government. The attorneys at Levine & Glassman have the knowledge to guide you through filing a Qui Tam claim. They are relentless in their investigation in order to present the best case possible to the United States government.

Levine & Glassman, P.A. – Florida Qui Tam Lawyers

The attorneys at Levine & Glassman have extensive experience at evaluating and pursuing medical malpractice and fraud claims in Fort Lauderdale and the surrounding areas of Broward, Miami-Dade, and Palm Beach counties. Contact our firm at (954) 332-6100 or using out online contact form and one of our attorneys will evaluate your potential government contract fraud Qui Tam case, explain the process of filing such a claim, and answer any other questions you may have. Once you have all of the information about filing a government contract fraud Qui Tam case, and you fully understand the benefits and consequences, we can make a decision together on whether to proceed with your case.