US Joins Suit Against Navistar Defense Alleging False Claims Under Marine Corps Contract

The United States has intervened in a whistleblower suit filed in the District Court for the District of Columbia against Navistar Defense LLC.

Navistar Defense manufactured armored vehicles for the U.S. military and is a subsidiary of Navistar International LLC, headquartered in Melrose Park, Illinois. The suit alleges that Navistar Defense violated the False Claims Act by submitting fraudulent invoices to support inflated prices for commercial parts under its contract to supply MaxxPro Dash DXM Mine Resistant Ambush Protected (MRAP) vehicles.

“The Department of Justice will hold accountable those contractors who falsify information and thereby cause the military to pay inflated prices,” said Assistant Attorney General Jody Hunt for the Civil Division. “We will take steps necessary to protect the military’s procurement process from abuse.”

“Through rigorous enforcement of the False Claims Act, we protect taxpayer dollars from waste, fraud, and abuse,” said U.S. Attorney Jessie K. Liu for the District of Columbia. “We expect the utmost integrity and reliability from the contractors that design and build equipment that is meant to ensure that our men and women in uniform are adequately protected as they serve our country.”

In 2007, the U.S. Marine Corps awarded Navistar Defense a contract to build several hundred MRAP vehicles to replace the Humvee, which proved to be vulnerable to roadside explosive devices. Navistar Defense ultimately provided nearly 4,000 MRAPs under the contract. In 2009, as the focus of the war effort transitioned from the paved roads and flat terrain of the Iraqi deserts to Afghanistan’s rocky terrain, the Marine Corps sought to upgrade its MRAP vehicles with a modified Independent Suspension System (ISS). During the course of negotiations for the ISS, the Marine Corps asked Navistar Defense to provide evidence of prior commercial sales of the various parts that made up the ISS to ensure that the prices paid were fair and reasonable. The lawsuit alleges that Navistar Defense knowingly submitted fraudulent invoices that falsely purported to show prior, comparable commercial sales to conceal the inflated prices it was charging the Marine Corps. In reality, the lawsuit alleges, those sales never occurred.

The lawsuit was originally filed under the qui tam or whistleblower provisions of the False Claims Act by Duquoin Burgess, a former government contracts manager for Navistar Defense. Under the acts, a private party, known as a relator, can file an action on behalf of the United States and receive a portion of the recovery. The act permits the United States to intervene in and take over the action, as it has done here. If a defendant is found liable for violating the act, the United States may recover three times the amount of its losses plus applicable penalties.

The lawsuit is being handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of Columbia. Investigative support is being provided by the Defense Contract Audit Agency (DCAA), the Naval Criminal Investigative Service (NCIS), the Defense Criminal Investigative Service (DCIS), the Army Criminal Investigation Command (CID), and the Federal Bureau of Investigation (FBI).

The case is captioned United States ex rel. Burgess v. Navistar Defense, LLC (D.D.C). The claims alleged in the lawsuit are allegations only, and there has been no determination of liability.



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