Navistar to pay $50 million to settle complaint accusing it of fraudulent pricing

WASHINGTON — Navistar Defense has agreed to pay the U.S. government $50 million to settle a complaint filed by a former Navistar Defense employee accusing the company of fraudulent, inflated pricing for the thousands of mine-resistant, ambush-protected vehicles it sold to the U.S. Marine Corps from 2007 to 2012, according to a statement from the whistleblower’s legal team.

The U.S. District Court for the District of Columbia unsealed a 6-year-old complaint in December 2019 filed by Duquoin Burgess, a former contract director at Navistar. The complaint claimed the company violated the False Claims Act by forging invoices, catalog prices and other information used in negotiations to sell MRAP vehicles to the Marines.

Burgess sought at least $1.28 billion in damages, which roughly equates to the amount of money the former employee believed the company reaped from lying about its prices to the government.

The complaint, filed in 2013, was required to remain sealed until the U.S. government completed its investigation into the claims.

Burgess, who asked for a jury trial, was represented by the law firm Sanford Heisler Sharp. Burgess is set to receive $11.6 million of the settlement funds, according to the settlement agreement reviewed by Defense News.

His attorney Vince McKnight told Defense News in 2019 that the case is unusual because even the company’s top executives, including its president, allegedly knew about the fraudulent activity.

“This settlement delivers a strong message that the Government requires contractors to be truthful and honest in contract negotiations,” McKnight said in the May 27 statement. “Not only was there a significant monetary settlement, but the Government introduced a novel and exciting settlement term requiring it to have unfettered access to unprivileged company documents related to the allegations.”

The alleged forged and fraudulent pricing records were used to secure both the initial contract award and further orders from 2007 to 2012, according to the complaint filed by Burgess’ attorneys.

The company allegedly either forged sales history where there was no sales history or it nearly doubled commercial prices for a variety of critical MRAP parts like the chassis, the engine and the suspension system.

The complaint claims the company took advantage of the very critical need to rapidly procure MRAPs to protect soldiers against improvised explosive devices in Iraq and Afghanistan by inflating its prices for the vehicles.

Over the course of the MRAP contract’s five-year life cycle, the government paid Navistar approximately $9 billion for its MaxxPro MRAPs, according to the complaint, but a conservative estimate alleges that roughly $1.28 billion of that was based on fraud. According to the complaint, the government could be entitled to up to three times the actual damages suffered if the judge finds the Navistar guilty of fraudulent conduct — a total of $3.84 billion.

According to the settlement agreement, “Navistar expressly denies the allegations” brought forward in the civil action and complaint and the agreement “is not an admission of any wrongdoing or liability by Navistar.”

Likewise, the agreement “is not a concession” by the U.S. government or Burgess that “claims are not well founded,” the document noted.

Jen Judson is an award-winning journalist covering land warfare for Defense News. She has also worked for Politico and Inside Defense. She holds a Master of Science degree in journalism from Boston University and a Bachelor of Arts degree from Kenyon College.

华盛顿——据举报人的法律团队发表的声明称，纳威斯达防务公司已同意向美国政府支付 5000 万美元，以和解一名纳威斯达防务公司前雇员提出的投诉。该雇员指控该公司在 2007 年至 2012 年间向美国海军陆战队出售的数千辆防地雷、防伏击车辆存在欺诈性、虚高定价行为。

2019年12月，美国哥伦比亚特区地方法院解封了杜奎因·伯吉斯（Duquoin Burgess）提交的一份六年前的诉状。伯吉斯是纳威斯达公司（Navistar）的前合同主管。诉状称，该公司违反了《虚假申报法》，伪造发票、产品目录价格以及其他用于向海军陆战队出售防地雷反伏击车（MRAP）谈判的信息。

伯吉斯寻求至少 12.8 亿美元的赔偿，这大致相当于这位前雇员认为该公司通过向政府谎报价格而获得的金额。

该投诉于 2013 年提出，根据规定，在美方完成对相关指控的调查之前，该投诉必须保持保密状态。

要求陪审团审判的伯吉斯由桑福德·海斯勒·夏普律师事务所代理。据《防务新闻》查阅的和解协议显示，伯吉斯将获得1160万美元的和解金。

他的律师文斯·麦克奈特 (Vince McKnight) 在 2019 年告诉《防务新闻》，此案不同寻常，因为就连该公司的高管，包括其总裁，据称也知道这种欺诈活动。

麦克奈特在5月27日的声明中表示：“这项和解协议传递了一个强烈的信号，即政府要求承包商在合同谈判中必须诚实守信。不仅和解金额巨大，政府还引入了一项新颖且令人振奋的和解条款，要求其不受限制地查阅与指控相关的非特权公司文件。”

根据伯吉斯律师提交的诉状，涉嫌伪造和欺诈的定价记录被用于确保获得最初的合同以及 2007 年至 2012 年的后续订单。

据称，该公司要么伪造了原本没有销售记录的销售记录，要么将各种关键的 MRAP 部件（如底盘、发动机和悬挂系统）的商业价格提高了近一倍。

投诉称，该公司利用伊拉克和阿富汗急需快速采购防地雷反伏击车以保护士兵免受简易爆炸装置袭击的迫切需求，抬高了车辆价格。

根据诉状，在防地雷反伏击车（MRAP）合同的五年周期内，美国政府向纳威斯达公司支付了约90亿美元用于购买其MaxxPro MRAP装甲车，但保守估计，其中约12.8亿美元系欺诈所得。诉状称，如果法官认定纳威斯达公司存在欺诈行为，美国政府可能获得高达实际损失三倍的赔偿，即总计38.4亿美元。

根据和解协议，“纳威司达明确否认”民事诉讼和投诉中提出的指控，并且该协议“并不代表纳威司达承认任何不当行为或责任”。

该文件指出，同样，该协议“并非美国政府或伯吉斯做出让步”，即“这些主张没有根据”。

珍·贾德森是一位屡获殊荣的记者，为《防务新闻》报道陆地战争。她也曾为《政治报》和《内幕防务》工作。她拥有波士顿大学新闻学硕士学位和凯尼恩学院文学学士学位。