Defense Contractor Hit with Potentially More than $100 Million in Damages Following Huntsville Jury Verdict
A recent Huntsville jury verdict is sending a clear message to defense contractors across the nation: fraudulent defense contracts with the U.S. are likely to result in harsh consequences.
On September 24, 2021, a federal court jury found a defense contractor liable for fraudulently inducing the U.S. Army into military contracts with Saudi Arabia, El Salvador and Costa Rica.
Because this case was originally brought by a whistleblower under the False Claims Act (FCA), the verdict could result in as much as a $100 million payout to the whistleblower and the U.S. government.
Understanding the Case
The lawsuit, originally filed in 2013, was filed under the FCA by two former employees of MD Helicopters. The two whistleblowers alleged that the Army contracted with MD Helicopters to buy military helicopters that the Army would then sell to three American allies: Saudi Arabia, El Salvador and Costa Rica.
However, as the whistleblowers alleged, MD Helicopters failed to comply with the Army’s contract code, and the company improperly involved itself with an Army contracting officer, who later accepted a job offer from MD Helicopters.
After closing arguments, the jury made quick work of the plaintiff’s claims, needing just an hour’s worth of deliberation to find MD Helicopters liable on three different claims. The jury awarded baseline penalties of nearly $3.8 million on the first claim, $29.7 million on the second, and $3.3 million on the third.
Because the lawsuit was brought under the FCA, the whistleblowers and the U.S. government stand to receive triple the damages awarded by the jury, over $100 million in this case. Of this amount, the whistleblowers are entitled to receive up to 30%.
The exact amounts to be paid out, however, will be determined in negotiations between the whistleblowers and the Department of Justice.
What This Means Going Forward
By dealing falsely with the U.S. government on military contracts, defense contractors like MD Helicopters do not simply steal from taxpayers, they endanger our national security. However, this verdict sets an example of juries’ collective determination to hold defense contractor’s accountable through the FCA.
With the FCA, fraudulent military contracting can be stopped by those who know the fraud best: the present and former employees of defense contractors. By offering substantial rewards and effective protection from retaliation, the FCA is a way to help our military put an end to defense contracting fraud once and for all.
At Price Armstrong, we have extensive experience litigating military contracting fraud cases under the False Claims Act. Whistleblowers are critical in the fight against fraudulent defense contractors, and we make it our mission to protect them every step of the way and maximize their recovery. Contact us today for a free initial consultation and review of your case.