FOR IMMEDIATE RELEASE                                         CIV
THURSDAY, MARCH 2, 1995                            (202) 616-2765
                                               TDD (202) 514-1888

                                 
    UNITED STATES INTERVENES IN SUIT ALLEGING FUEL PRICE FRAUD


     WASHINGTON, D.C. -- The Department of Justice today charged
a New York and Washington, D.C., oil company with fraudulently
overcharging the government more than $18 million for marine fuel
supplied at ports in the United States and overseas.
     Assistant Attorney General Frank W. Hunger, in charge of the
Civil Division, said the government intervened in a qui tam suit
filed in U.S. District Court in Washington, D.C., alleging that
Med-Atlantic Petroleum Corp. defrauded the United States Defense
Fuel Supply Center on nine contracts.   
     According to the suit, Med-Atlantic submitted unreasonably
low bids to obtain federal contracts for marine fuel, then
charged the government prices that were significantly higher than
the contract price.  
     The suit said the Defense Fuel Supply Center awarded the
two-year contracts to Med-Atlantic for fuel purchases by the Navy
and other federal agencies at such ports as Oakland, California;
Bayonne, New Jersey; Singapore; and Gibraltar.  
     The contracts permitted a weekly modification of fuel
delivery prices, as published in a designated industry
publication, because of fluctuations in the market price of fuel
over the period of each contract.  
     The suit said that from 1990 through 1992, Med-Atlantic
falsely represented the weekly delivery prices for the fuel,
arbitrarily inflating the price as much as 40 percent.  It then
submitted invoices to the government which, because of the
inflated invoice prices, paid substantially more for the fuel. 
     The suit was filed by Kevin Welber, an attorney with Trans-Tec Co.
of Alexandria, Virginia, a Med-Atlantic competitor. 
     Under the qui tam provisions of the False Claims Act, a
person can file a suit on behalf of the United States and receive
up to 30 percent of any damages if the government takes over the
suit and prosecutes it successfully.  
     The government's damages were calculated from audits by the
Defense Fuel Supply Center and Navy Criminal Investigative
Service.  
                              #####
95-118