Dec. 5 (UPI) — The federal government has joined a lawsuit accusing Navistar International and its defense unit of defrauding the United States to the tune of $1.3 billion, according to court filings made public this week.
The legal complaint, released Wednesday, accuses the company of violating the False Claims Act by submitting fraudulent invoices and charging inflated prices for commercial parts for military vehicles used by the United States in Iraq and Afghanistan.
“The Department of Justice will hold accountable those contractors who falsify information and thereby cause the military to pay inflated prices,” said Jody Hunt, assistant attorney general for the Civil Division. “We will take steps necessary to protect the military’s procurement process from abuse.”
The U.S. Marine Corps awarded Navistar Defense a contract in 2007 to build several hundred Mine Resistant Ambush Protected vehicles to replace the Humvee. The contractor provided nearly 4,000 MRAPs under the contract, the Department of Justice said. While negotiating an upgrade, the Marine Corps asked Navistar to provide receipts for parts used, and the lawsuit says Navistar knowingly submitted fraudulent invoices to conceal the inflated prices the contractor was charging.
The lawsuit was originally filed in 2013 by Duquoin Burgess, a former government contracts manager for Navistar Defense. In September the federal government chose to intervene. The suit was sealed until the government completed its investigation into the allegations.
Navistar spokeswoman Lyndi McMillan, told Crain’s Chicago the suit was not well-founded.
“We believe our pricing was fair, reasonable and competitive, and we are disappointed the government has chosen to intervene in this matter,” McMillan said in an email. “The company intends to defend itself as necessary and appropriate.”