DOJ intervenes in whistleblower suit alleging fraud in Navy ship “husbanding” contracts

by Ben Vernia | December 1st, 2015

On November 18, the Department of Justice announced that the government had elected to intervene in a False Claims Act suit brought by three former employees of Inchcape Shipping Services Holdings Ltd., alleging that the firm defrauded the Navy on contracts over nearly a decade:

The government announced today that it has joined a lawsuit alleging that Inchcape Shipping Services Holdings Limited and certain of its subsidiaries (collectively, Inchcape) violated the False Claims Act by knowingly overbilling the U.S. Navy for ship husbanding services from years 2005 to 2014.  Inchcape is a marine services contractor headquartered in the United Kingdom.

As a ship husbanding services provider, Inchcape arranged for the provision of goods and services to Navy ships at ports in several regions throughout the world, including southwest Asia, Africa, Panama, North America, South America and Mexico.  Inchcape’s services typically included the provision of food and other subsistence items, arrangement of local transportation, waste removal, telephone services, ship-to-shore transportation and force protection services.  The lawsuit, which was unsealed today, alleges that Inchcape knowingly overbilled the Navy by submitting invoices that overstated the quantity of goods and services provided, billed at rates in excess of applicable contract rates and double-billed for certain goods and services.

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The lawsuit was brought under the qui tam, or whistleblower, provisions of the False Claims Act by three former employees of Inchcape, Noah Rudolph, Andrea Ford and Lawrence Cosgriff.  Under the act, a private citizen may bring suit on behalf of the United States and share in any recovery.  The government may intervene in the case, as it has done here.  The False Claims Act allows the government to recover treble damages and penalties from those who violate it.

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