Air Force subcontractor pays nearly $2 million to settle whistleblower suit

by Ben Vernia | November 25th, 2010

The Department of Justice announced on November 24 that CDI Corp. of Philadelphia has agreed to pay $1.95 million to settle False Claims Act allegations brought by a former employee. According to DOJ’s press release:

CDI Corporation has agreed to pay the United States $1.95 million to resolve allegations in a lawsuit brought under the False Claims Act that CDI wrongfully charged labor costs to work orders under military aircraft engine contracts for The General Electric Company (GE), the Justice Department announced today. According to the government’s allegations, the work for which the military was charged was not actually performed.

CDI is headquartered in Philadelphia. The CDI regional office, located in Sharonville, Ohio, was the subject of the False Claims Act allegations. CDI is a supplier of engineering services under time and material subcontracts with GE Transportation and Aviation divisions for engineering work on commercial and military projects.

The civil investigation examined CDI’s labor and billing records from Jan. 15, 2001, to Dec. 31, 2006. The civil investigation found that during this time period, CDI directed the mischarging of employees’ labor costs to purchase orders that would be reimbursed by the U.S. military. In fact, the employees did not perform the work billed to those military projects. CDI entered these mischarged labor costs in increments of 0.5 hours or less to evade detection.

The Department announced that the relator will receive $360,750 (an 18.5% relator’s share).

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