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Inchcape Shipping Services Holdings Limited Agrees to pay $20 million to Settle Charges that it Overcharged the US Navy

Few things raise the ire of the government more than those who are alleged to have illegally siphoned resources away from American service men and women. This is what the government alleges happened last week when the Department of Justice announced that Inchcape Shipping Services Holdings Limited and several of its subsidiaries have agreed to pay $20 million to resolve allegations that they violated the False Claims Act. The contractor with the US Navy is accused of knowingly overbilling for contracts related to its husbandry services. (Inchcape is headquartered in the UK.) The lawsuit alleged that from 2005 to 2014, Inchcape knowingly overbilled the Navy for services such as waste removal, telephone services, ship-to-shore transportation, force protection services and local transportation. According to the government, Inchcape overstated the quantity of goods and services it provided and billed the Navy at rates in excess of its contract. Finally, the government alleges that Inchcape double-billed for some of its goods and services.

“Federal contractors may only charge the government for costs allowed by their federal contracts,” said Acting Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “The Department of Justice will take action against contractors that knowingly submit inflated claims to the armed forces—or any other agency of the United States—as those inflated claims wrongfully divert taxpayer dollars.” “We trust contractors supporting our war fighters to act with the utmost integrity and expect them to comply with their obligations to bill the government as called for by their contracts,” said U.S. Attorney for the District of Columbia Jessie K. Liu. “This settlement reflects our Office’s strong commitment to holding accountable those who violate these fundamental principles, no matter where they may be located.”

The settlement arose from a case that was filed by several former employees of Inchcape under the qui tam provisions of the False Claims Act. Under the act, private citizens may -either with or without the aid of whistleblower lawyers – bring suit on behalf of the government. Whistleblowers can not only bring suit on behalf of the United States, they are also entitled to a share of any recovery. The government intervened in this case as it usually does. The government has intervened in many such instances including in qui tam Medicare cases. As part of last week’s resolution, the whistleblowers – Noah Rudolph, Andrea Ford and Lawrence Cosgriff – will receive approximately $4.4 million.