August 8, 2014 — Companies that attempt to cheat taxpayer-funded programs created to help American businesses in the global marketplace risk suffering retribution under the False Claims Act. Under the qui tam provisions of the federal statute, insiders who collaborate with the government by filing a whistleblower lawsuit are eligible for a significant portion of the government’s recovery.
BNP Paribas Filed False Claims to USDA for Payments Under Supplier Credit Guarantee Program
An $80 million judgment has been entered against BNP Paribas in a False Claims Act lawsuit alleging that the global financial institution submitted phony claims for U.S. Department of Agriculture (USDA) payment guarantees.
The USDA Supplier Credit Guarantee (SCG) Program offered payment guarantees to U.S. exporters that sold agricultural commodities to foreign importers. Should the foreign importers fail to pay on the contracts, the program would cover a portion of the American companies’ losses. But American exporters and foreign importers that were owned or controlled by the same company were not eligible to participate under the SCG Program.
The U.S. Justice Department’s False Claims Act lawsuit alleged that between 1998 and 2005, American exporters teamed up with Mexican importers that were under common control in a scheme to extract ineligible SCG Program guarantees. At times, the exporters applied for guarantees for sham transactions that did not even involve grain shipments. BNP Paribas took assignments of the SCG guarantees from the American exporters, despite knowing that the importers and exporters were commonly controlled. Indeed, to entice BNP Paribas’ involvement in the scheme, the Mexican importers paid bribes to Jerry Cruz, a BNP Paribas vice-president. When the importers started defaulting on their payments in April 2005, BNP Paribas filed claims with the USDA to cover the resulting losses.
False Claims Act Lawsuits Redress Abuse
While Waters Kraus & Paul is not handling this particular case, we are representing whistleblowers in similar False Claims Act lawsuits. If you have similar claims against a different government contractor, contact us by email or call our qui tam attorneys at 855.784.0268 to learn more about our practice and how we can work together to notify the government about fraudulent abuses of government-funded programs. George Tankard and Anne Izzo, qui tam lawyers in Waters & Kraus’ Maryland office, protect tipsters throughout the whistleblower lawsuit process.