Bollinger Shipyards Agrees to Settle False Claims Act Suit
We’ve seen some False Claims Act cases in the news that have been very impactful on various governmental agencies and private companies, but the following case is especially troubling. It involves a charge of fraud that affects a major branch of the US armed forces – the Coast Guard – and the functionality of its military vessels. Back in August of 2011, the US Justice Department filed suit against Bollinger Shipyards Lockport LLC and Halter Bollinger Joint Venture LLC, alleging that they had made false statements to the Coast Guard for the purpose of securing a contract to modify the design of several ships.
It was the government’s charge at that time that Bollinger – back in 2002 – had proposed converting the Coast Guard’s existing 110-FT Patrol Boats (WPDs) into 123-Ft WPBs by extending their hulls and making additional modifications. The government alleged that Bollinger misrepresented the hull or longitudinal strength of the converted vessels in order to secure a contract to convert eight more Coast Guard cutters. The Justice Department also said that Bollinger’s fraudulent activity included failing to follow other quality control procedures that were mandated by their contract.
As a result the first cutter, the Matagorda, suffered hull failure when it was put into service. The modifications Bollinger made to the other vessels caused them to be unseaworthy as well. Attempts to repair the vessels were unsuccessful and these ships were eventually taken out of service. In December of this year, Bollinger finally agreed to pay the United States $8.5 million and to release contract claims to settle this False Claims action filed against it back in 2011.
The case was handled by both the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office of the Eastern District of Louisiana. If you are the defendant in a qui tam law suit, you are advised to hire a False Claims Act attorney who has the expertise to counsel you in this area of the law.
