N.J. Defense Contractor Pays $1.1 Million to Settle Suit Over False Certifications to Military

Office of Inspector General

Title:	N.J. Defense Contractor Pays $1.1 Million to Settle Suit Over False Certifications to Military
Date:	September 08, 2005
Type:	Investigation
Summary:	NEWARK - Breeze-Eastern, a Union, New Jersey company that manufactures, overhauls and repairs helicopter hoists and hooks, has agreed to pay the government more than $1 million to settle allegations that it made false certifications to the United States military concerning the overhaul and repair of equipment, U.S. Attorney Christopher J. Christie announced today. The settlement resolved the allegations of a civil complaint against Breeze-Eastern and its parent company, TransTechnology Corp., filed in 2003. The complaint alleged violations of the False Claims Act, which permits recovery of triple the amount of the damages to the government plus penalties, according to Assistant U.S. Attorney Stuart A. Minkowitz, of the Civil Division of the U.S. Attorney's Office. As part of the settlement, $1 million will be paid in three installments over the next year. The remaining portion of the settlement - $108,852 - will be reflected as a credit toward future overhaul and repair services. The settlement was signed on Tuesday and was unsealed today by U.S. District Judge Joseph A. Greenaway, Jr. The lawsuit was originally filed under seal in accordance with the whistle blower provisions of the federal False Claims Act by Lorenzo Marrero, an employee of Breeze-Eastern. The whistle blower provisions permit private citizens to bring lawsuits on behalf of the United States and share in any recovery obtained by the government. Under the False Claims Act, Marrero will receive a 20-percent share of the settlement, or approximately $220,771. 'We will continue to encourage people like Mr. Marrero to come forward when they believe fraud is being committed against the United States military or any other branch of the federal government,' Christie said. According to the Settlement Agreement, between 1993 and 2005, Breeze-Eastern submitted claims for payment based on various contracts with government agencies, including the Department of Defense and U.S. Coast Guard. Breeze-Eastern is required to submit certifications that it has complied with contractual specifications when providing overhaul and repair services to hoists and hooks primarily used in helicopter applications including military equipment transport and rescue operations. According to the Complaint, these certifications were falsified, and Breeze-Eastern had instead altered serial numbers and installed used parts during these overhauls and repairs. During this investigation, no evidence was found attributing the false certifications to specific mechanical failures or accidents. TransTechnology has denied any wrongdoing in connection with this matter. TransTechnology cooperated in the investigation and has recently instituted additional measures to ensure compliance with government contracts in the future, according to Assistant U.S. Attorney Minkowitz. Christie credited Special Agents and investigators assigned to the Defense Criminal Investigative Service, Department of Transportation Office of the Inspector General, Naval Criminal Investigative Service, Army Criminal Investigation Command and Air Force Office of Special Investigations with investigating the case. The case was handled by Paul J. Wogaman, of the Department of Justice's Commercial Litigation Branch, Assistant U.S. Attorney Daniel J. Gibbons, Deputy Chief of the Civil Division and Assistant U.S. Attorney Minkowitz.