US sues defense contractor Navistar for overbilling Marines $1.3B

Navistar won a 2007 contract to replace Marines' old armored vehicles with new models

The U.S. government is accusing contractor Navistar Defense of defrauding the U.S. Marine Corps of $1.3 billion under contracts that garnered total payments of about $9 billion, according to federal court records.

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The defense contractor "wildly" overbilled the Pentagon for armored vehicle parts sold to the Marines by submitting fraudulent invoices and documents, a lawsuit filed in federal court in Washington alleges.

"Contractors who falsify information to induce the military to pay inflated prices will be held accountable," Assistant Attorney General Jody Hunt, of the Justice Department's civil division, said in a statement.

U.S. Marines with 1st Reconnaissance Battalion in a ceremony at Camp Pendleton, California. (U.S. Marine Corps photo by Lance Cpl. Jailine L. AliceaSantiago)

"We will continue to protect the military’s procurement process from such abuse," she said.

Navistar won a contract with the Marines in 2007 to replace the Corps' old armored Humvees, which were vulnerable to roadside explosives, with new Mine-Resistant Ambush Protected (MRAP) vehicles, and in 2009, the Marines asked Navistar to upgrade the vehicles to better navigate mountainous terrain in Afghanistan, according to the Washington Examiner.

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The lawsuit says the vehicles were "critical to the government’s military efforts in Iraq and Afghanistan," where conflicts began under President George W. Bush. The U.S. invaded Afghanistan after terrorists based in the country flew hijacked airliners into New York City's World Trade Center and the Pentagon on Sept. 11, 2001. Less than two years later, the American military overthrew Saddam Hussein's regime in Iraq amid concerns that he was amassing nuclear weapons.

In an attempt to conceal its overbilling for the vehicles, Navistar allegedly forged invoices and documents of earlier sales to the Marines, according to the complaint.

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The lawsuit also alleges that Navistar leadership was aware of the fraudulent activity and threatened those who spoke up.

"Employees who voiced concerns about defendants’ pricing practices were accused of being more loyal to the customer (i.e., the government) than to the company, and their positions were threatened," according to the lawsuit.

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Navistar's behavior violates the False Claims Act, which protects "taxpayer dollars from waste, fraud, and abuse,” Jessie Liu, U.S. Attorney for the District of Columbia, said in a statement. “We expect the utmost integrity and reliability from the contractors that design and build equipment that is meant to ensure that our men and women in uniform are adequately protected as they serve our country."