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Airbus Subsidiary Pays Over $1 Million to Settle Cost Accounting Fraud Allegations

October 25th, 2021 | No Comments

On October 4, the Department of Justice announced that Airbus U.S. Space & Defense, Inc., had agreed to pay over $1 million to settle a whistleblower’s allegations that the company mischarged federal agencies in government contracts. According to DOJ’s press release:

The settlement resolves allegations that from January 2016 through January 2017, ADSI submitted proposals for contracts that included an unapproved cost rate to which ADSI was not entitled. ADSI referred to this as the “Orlando Factor.” The government further alleged that on certain contracts, during 2013 through 2020, ADSI charged federal government agencies an additional fee from its affiliates on top of ADSI’s own fee for parts ADSI acquired from its affiliates, but did not accurately disclose this affiliate fee to the government. Finally, the government alleged that ADSI charged a third-party contractor an excessive monthly storage fee to store a radar system purchased to support a contract with the U.S. Navy. The contractor passed along the full storage fees charged by ADSI to the U.S. Navy. However, ADSI did not disclose that they paid only a portion of those storage fees to store the radar system.

The Vernia Law Firm represented the whistleblower in the case, Maros Kmec, a former employee of the Airbus subsidiary. Mr. Kmec received $157,220 of the False Claims Act settlement (a 19% relator’s share of the portion of the settlement which addressed Mr. Kmec’s qui tam allegations).

Student loan servicing company settles fraud allegations for $7.9 million

January 16th, 2022 | No Comments

On January 14, the Department of Justice announced that Conduent Education Services, LLC had agreed to pay $7.9 million to settle allegations that the company submitted false claims in connection with servicing federally funded student loans. According to DOJ’s press release:

Conduent Education Services LLC, fka Xerox Education Services LLC, dba ACS Education Services LLC (CES), a contractor that serviced student loans for lenders under the Federal Family Education Loan Program (FFEL), has agreed to pay $7.9 million to resolve allegations that it violated the False Claims Act by submitting or causing the submission of false claims to the Department of Education. Prior to this settlement, CES paid $1.4 million to the Department of Education under a remediation plan to partially resolve the allegations and received a credit for that payment under the settlement agreement.

Loan servicers are required to accurately report the impact of monthly student loan repayments, principal capitalization and other changes to borrower accounts to the Department of Education. The settlement announced today resolves allegations that between 2006 and 2016, CES knowingly failed to make required financial adjustments to borrower accounts and improperly treated some borrowers as eligible for military deferments when they were not, resulting in incorrect reporting to the Department of Education and losses to the United States. CES stopped servicing commercially held federal student loans in September 2019.

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The case apparently arose from a Department of Education investigation, rather than by a whistleblower’s lawsuit.

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