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Aerospace Corporation Settles False Claims Act Investigation About Phantom Employee

The United States has received $2.5 million in settlement from the Aerospace Corporation, which the government alleged had billed the Air Force over a seven year period for the services “performed” by an employee who hardly ever showed up for work and was unqualified to do the job. Aerospace paid the settlement to end an investigation that uncovered alleged violations of the federal False Claims Act. Aerospace is a non-profit corporation working for the Air Force, NASA, the National Reconnaissance Office and the National Oceanic and Atmospheric Administration.

From 2001 to 2008, the non-profit employed William Hunter as a software quality assurance engineer.  Hunter told Aerospace when he was hired that he held a doctorate from Oxford University, when in reality, Hunter had only a high school education. Further, during the entire time Hunter “worked” for Aerospace, he was also employed by another defense contractor. Hunter filled out time cards at both places as if he were working full time at both; indeed, he collected substantial overtime pay during his seven year stint with Aerospace. According to the government, however, Hunter spent a good deal of his time at theaters, bars, amusement parks, and other off-site locations. Remarkably, the government’s investigation revealed that Aerospace knew about Hunter’s shenanigans, but billed the Air Force for his time anyway.

The False Claims Act allows the United States to recover three times its damages plus civil penalties in cases of fraudulent schemes against the government. In cases such as this one, the investigation is initiated by the government. Other times, the government only learns of the fraud when a whistleblower has the courage to come forward and file a lawsuit. Under the qui tam provisions of the False Claim Act, an employee who knows that a coworker is bilking the government is able to redress the wrong by filing a lawsuit on the government’s behalf.  If a recovery is made, the employee shares a sizable portion of that amount.

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