Telephonics Corporation Pays $4.25 Million to Settle Overbilling Claims on Army & Navy Contracts

[nitpicker]

https://www.justice.gov/usao-edny/pr/long-island-based-telephonics-corporation-pays-425-million-settle-overbilling-claims

Department of Justice
U.S. Attorney’s Office
Eastern District of New York

FOR IMMEDIATE RELEASE
Friday, November 17, 2017

Long Island-Based Telephonics Corporation Pays $4.25 Million to Settle Overbilling Claims on Army & Navy Contracts

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, today announced that Telephonics Corporation, based in Farmingdale, New York, has agreed to pay $4,250,000 to the United States to settle claims that Telephonics overbilled the federal government under certain contracts to provide vehicle-mounted counter-improvised explosive device systems (Warlock Systems) to the Army and multi-mode radar systems (LAMPS Systems) to the Navy. The settlement announced today is the result of a joint investigation conducted by the Defense Criminal Investigative Service (DCIS), the U.S. Army Criminal Investigation Command and the Naval Criminal Investigative Service (NCIS).
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Between 2004 and 2007, Telephonics, a corporation that provides services, products and technology to the Department of Defense, subcontracted to provide work and materials for the assembly of the Army’s Warlock Systems and the Navy’s LAMPS Systems. The Warlock Systems are installed in vehicles to interrupt wireless systems designed to trigger improvised explosive devices and are used in Afghanistan and Iraq. The LAMPS Systems are used on Navy helicopters.

The government contends that Telephonics did not provide accurate cost data in connection with certain contracts for the Warlock and LAMPS Systems. Specifically, Telephoncs improperly billed the Army and Navy by calculating invoices using: 1) inflated “estimates” when then-current available information showed lower actual costs; and 2) different labor rates than those set forth in relevant contracts. There was no allegation about the quality of Telephonics’ products or services. The settlement is not an admission of wrongdoing by Telephonics.
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