Ship husbanding firm Inchcape to pay $20m for US Navy fraud case settlement

Ship husbanding company Inchcape Shipping Services Holdings Limited and its subsidiaries have agreed to pay $2o million to settle a US case in which they were accused of knowingly overbilling the US Navy for their services, the US Department of Justice announced May 29.

Illustration: US Navy photo of aircraft carrier USS Harry S. Truman (CVN 75) arriving in Souda Bay, Greece, for a port visit.

Inchcape is a UK-headquartered marine services contractor which operates in over 60 countries.

Inchcape provided goods and services to US Navy ships at ports in several regions throughout the world, including southwest Asia, Africa, Panama, North America, South America and Mexico.

The lawsuit alleged that from 2005 to 2014, Inchcape knowingly overbilled the Navy for these services by submitting invoices that overstated the quantity of goods and services provided, billing at rates in excess of applicable contract rates, and double-billing for some goods and services.

“Federal contractors may only charge the government for costs allowed by their federal contracts,” said Acting Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “The Department of Justice will take action against contractors that knowingly submit inflated claims to the armed forces—or any other agency of the United States—as those inflated claims wrongfully divert taxpayer dollars.”

The lawsuit was brought under the qui tam, or whistleblower, provisions of the False Claims Act by three former employees of Inchcape, Noah Rudolph, Andrea Ford and Lawrence Cosgriff. Under the act, a private citizen may bring suit on behalf of the United States for false claims and share in any recovery. The government may intervene in the case, as it did here. The False Claims Act allows the government to recover treble damages and penalties from those who violate it.

As part of the resolution, the whistleblowers will receive approximately $4.4 million.

“This settlement demonstrates that the Department of the Navy will continue to hold contractors accountable for the agreements they make to supply our fleet,” said Secretary of the Navy Richard V. Spencer. “The department expects strict adherence to higher standards within the Department and expects the same from its contractors.”