False Claims Act Allegations Result in $15.85 Million Settlement with Lockheed Martin

Lockheed Martin Corp., one of the largest defense contractors in the world, has agreed to a $15.85 million settlement to resolve allegations under the False Claims Act that the company overcharged the U.S. government for perishable tools supplied by its subcontractor Tools & Metals, Inc. (TMI), according to the Justice Department. The subcontractor allegedly charged Lockheed Martin inflated amounts for its perishable tools to be used on military aircraft, which Lockheed Martin passed on to the government. The scheme involved numerous defense contracts with the federal government over a seven-year period.

Lockheed Martin passed these inflated prices on to the government because the company recklessly failed to monitor TMI’s charges and mishandled information it did obtain about TMI charging practices.

The scheme was brought to light by two whistleblowers who brought separate qui tam lawsuit under the False Claims Act.  These lawsuits were consolidated in the federal district court in Dallas, Texas. The False Claims Act authorizes individuals with knowledge of fraudulent activity against the federal government to file a lawsuit on behalf of the government and to share a portion of any recovery.

In this case, the two men who blew the whistle on the fraud by TMI and Lockheed Martin will share $2 million of the settlement.

A former TMI president, Todd B. Loftis, pleaded guilty for his role in the scheme and is serving a seven-year prison sentence.

Waters & Kraus is a national firm with highly skilled lawyers practicing qui tam litigation in four offices, including Dallas, Los Angeles, San Francisco, and Baltimore. Our attorneys have decades of experience successfully representing whistleblowers in a variety of fraud cases. Contact us or call our attorneys at 800.226.9880 to learn more about our practice and how we can assist.

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