New Jersey Defense Contractor Fraud Lawyer

The government spends more than half of the federal budget every year on defense. This amounts to around $600 billion annually. Of these funds, a percentage goes to defense contractors in New Jersey.

With so much money in defense contracting, the temptation for fraud is everywhere. Of course, committing fraud against the federal government is a crime.

A New Jersey defense contractor fraud lawyer could defend people and companies accused of defense contractor fraud. Work with a skilled fraud attorney and know that you are in capable hands.

What is Defense Contractor Fraud?

All contracts the federal government issues must undergo a bidding process. Generally, the government will choose to work with a contractor who gives the lowest bid for a project. But in some situations, there is only one bidder for the contract. This process is the first opportunity for fraud.

If a contractor improperly lists the costs associated with producing a product, they may be in violation of the Truth in Negotiations Act.  However, fraud is much more likely to occur during the production phase of the contract. This can involve any number of activities including producing products at a substandard level, improper cost allocation, and inflation of costs or charges.

Producing Products at a Substandard Level

Since the government cannot perform quality checks for all received products, it relies on the contractor to do so. If the items the company produces are not up to par, the government may charge the company with fraud.

Improper Cost Allocation

Many contractors do business with companies in addition to the federal government and sell the same products to multiple clients. During the bidding process, they may quote a price to the government that is less than the actual cost and then shift that cost onto their other clients.

Inflation of Costs or Charges

Some contracts include a price for both the item and the production costs. The costs to produce the item can be difficult to estimate, but any contractor who inflates this cost by adding on unnecessary hours of labor or false equipment orders may face a fraud charge.

How Fraud Claims Are Prosecuted

The U.S. Attorney’s Office pursues most allegations of fraud against the Federal Government using the False Claims Act. The government enacted this law during the Civil War to control contractors who sold shoddy equipment to the Union Army. It survives today as the government’s main means to investigate and prosecute fraud.

The law is in 31 U. S. Code 3729. It states that it is illegal to:

  • Knowingly present a false claim for payment
  • Knowingly make a false record or statement material to a fraudulent claim
  • Knowingly make or use a false record to collect money from the government

Any violation of this act is a civil matter. However, the applicable fines are stiff. A violation is punishable by a fine between $5,000 and $10,000.  In addition, they may impose a penalty of three times the value of the amount defrauded. A New Jersey defense contractor fraud lawyer could mitigate the penalties a person may face.

Working With a New Jersey Defense Contractor Fraud Attorney

Any claim of fraud against a company doing business with the federal government is a serious matter. The company faces heavy fines and penalties, and the government may bar them from future bids.

A New Jersey defense contractor fraud lawyer could work to defend people facing these allegations. They fight to protect individuals from not just the immediate charges, but also from any future damage to their reputations. Contact an attorney today to see how they may be able to help.