What is Defense Contractor Fraud?
The U.S. government relies on private companies to deliver on their promises across many sectors, but none is arguably more important than those provided by defense contractors. Products could be advanced combat equipment for soldiers, sophisticated, multi-billion dollar weaponry systems, or even simple items such as vehicle parts, ammo, and computers. Services may instead include vital intelligence analysis performed by private agencies required by servicemen and women who fight secure American interests abroad and at home.
Each year our national defense and international security expenditures amount to approximately $602 billion, wich is about 16% of the Federal budget. As the role of private contractors has expanded within the Department of Defense (DoD) so have their costs that accounted for $110.3 billion in spending in 2014. Taxpayers are those who ultimately pay the price of this type of fraud, as their taxes are shifted to overpay for these malicious scammers instead of being reinvested into better community services. According to a DoD report prepared in the Senate, since 2011 the amount of these petty thefts caused losses up to $1.1 trillion.
The recent wars in Afghanistan and Iraq, as well as our efforts in fighting terror, significantly increased the international scope and size of military contracts. On the other hand, more sophisticated schemes are, by their nature, complex to detect. A company may only test a minority of the total equipment provided, or use advanced computer software to falsify private employee hours. For this reason, the Department of Justice’s Whistleblower Program’s division in conjunction with the Department of Defense have recently made a concerted effort to work with individuals who have insider knowledge to uncover and prosecute corrupt defense contractors. Since 1987, over $2.6 billion have been recovered from military frauds. Qui tam relators who assisted the authorities have received $455 million in rewards so far.