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