Northrop Grumman Corp. Pays $11.4 Million to Settle False Claims Act Allegations

January 15, 2014 — Too often, the U.S. government falls prey to false claims from government contractors. But what can insiders do to stop an unscrupulous employer that’s bilking the government? The qui tam provisions of the False Claims Act give tipsters the ability to file suit for the government in federal court. To reward whistleblowers willing to do the right thing, the Act entitles informants to a share the government’s ultimate recovery.

Northrop Allegedly Hid Unallowable Costs to Government in Thousands of Contracts and Vouchers

Northrop Grumman Corp. has paid $11.4 million to settle allegations that the government contractor violated the False Claims Act by failing to honor a 2002 settlement agreement with the Defense Contract Management Agency (DCMA). According to the Justice Department, Northrop improperly charged costs for employees’ deferred compensation awards to its federal contracts, despite the fact that it was barred from doing so under the 2002 settlement.
In a 2002 settlement with DCMA, Northrop had agreed to limit the level of deferred compensation the company would include in subsequent contract proposals. The Justice Department alleged that in addition to violating the terms of its settlement, Northrop had also violated the False Claims Act by indirectly billing the government for the unallowable costs by passing them along in higher rates applicable to hundreds of government contracts made in 2004. As a result of Northrop’s intentional misrepresentations, the government allegedly paid over $1.9 million in unallowable costs hidden in thousands of Northrop’s invoices and vouchers.

Shutting Down False Claims Act Violations by Government Contractors

The whistleblower lawyers with Waters & Kraus understand the intimidation felt by many whistleblowers who have been pressured to keep quiet about schemes to bilk the government. We’ve worked with many other inside employees in your situation. Contact us or call our False Claims Act attorneys at 855.784.0268. With offices in California, Maryland and Texas, we’re available to make the qui tam process easier on you.

What are my chances?

That’s the first question everyone asks. The truth is it’s impossible to know. But we can tell you this. Waters Kraus Paul & Siegel has what it takes to fight against big corporate interests and win. That’s why we’ve taken more mesothelioma trials to verdict than any other firm. And that’s why we’ve recovered more than $1.3 billion for clients like you. Do you think you have a case? Contact us now to speak with an attorney.

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