U.S. JOINS SUIT ALLEGING SCHEME TO DEFRAUD GOVERNMENT
TO OBTAIN FEDERAL SURPLUS DRY DOCK IN HAWAII

WASHINGTON, D.C. - The United States has joined a lawsuit that accuses Tanadgusix Corporation of Alaska (TDX) and Marisco, Ltd. of Hawaii of conspiring to defraud the government out of a surplus naval dry dock, the Justice Department announced today. The suit was originally filed in Honolulu by Pacific Shipyard International, a competitor shipyard, under the qui tam or whistleblower provisions of the False Claims Act.

Pacific Shipyards’ complaint alleged that TDX and Marisco conspired to make false statements in order to obtain the drydock, including: (1) falsely representing that TDX intended to move the dry dock to Alaska, when in fact it intended to leave it in Hawaii, in violation of applicable regulations, and (2) falsely representing that TDX would retain full operational control and management of the drydock, when in fact TDX intended to allow Marisco to operate and control the dry dock for its profit, in violation of applicable regulations. Recipients of federal surplus property are required to use the donation in the state in which the donation took place, in this case Alaska, and are required to retain full operational control and management.

The investigation of the allegations in the qui tam complaint was conducted by the U.S. Attorney's office in Honolulu, the Department's Civil Division, and the Inspector General's Office at the General Services Administration.

Under the qui tam statute, a private party, known as a "relator," can file an action on behalf of the United States and receive a portion of the recovery. Under the False Claims Act, the United States may recover three times the amount of its losses plus civil penalties.

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