Settlement reached in Marine defense contractor bribery case

ALBANY — U.S. Attorney G.F. “Pete” Peterman announced Wednesday a $4.4 million civil settlement with trucking company Mercer Transportation Company Inc. to resolve allegations that it violated the False Claims Act by submitting claims for payment related to shipments originating at Marine Corps Logistics Base-Albany.

Officials said the claims for payment were obtained by bribery of government officials from 2006-12. The settlement resolves a lawsuit under the whistleblower provisions of the False Claims Act, which allows private individuals to bring civil actions on behalf of the government and to share in any recovery.

The law also allows the government to intervene and take over the action. Court officials said the individual who filed this case under the whistleblower provisions will receive $814,000 as his share of the recovery.

In its civil complaint, the federal government alleged that Mercer, through its agents, employees and representatives, bribed two government employees who worked at MCLB-Albany and who were responsible for awarding contracts for the shipment of government freight out of MCLB. The complaint alleged that the bribery of these employees resulted in Mercer being awarded contracts for shipments out of MCLB it otherwise would not have received from October 2006 through May 2012.

“In simple terms, fraud committed by defense contractors is theft directly from the American people,” Peterman, U.S. attorney for the Middle District of Georgia, said. “When dealing with the U.S. government – especially when dealing with the armed forces whose lives may depend on the work of these contractors – contractors are expected to act in good faith and to comply with their obligations.

“This U.S. Attorney’s Office will hold accountable contractors that seek to profit unfairly at the expense of American troops and taxpayers.”

The Defense Criminal Investigative Service was among those assisting in the investigation.

“This settlement demonstrates the commitment of the Defense Criminal Investigative Service and its law enforcement partners to protect the integrity of all Department of Defense programs,” Special Agent in Charge John F. Khin, of the Southeast Field Office, said. “DCIS’s efforts in this investigation mitigated further significant loss and waste of taxpayer dollars from this fraudulent scheme.”

Special Agent in Charge Mike Wiest, of the Naval Criminal Investigative Service Southeast Field Office that also was involved in the investigation, said maintaining the integrity of Navy procurement activities is a high priority.

“Through a joint investigation, NCIS and its partner agencies steadfastly pursued numerous allegations of corruption that caused significant harm to the U.S. Marine Corps and other Department of Defense equities resulting in this settlement,” he said.

Other agencies involved were the U.S. Army Criminal Investigative Command’s Major Procurement Fraud Unit and the U.S. Department of Justice’s Civil Division’s Commercial Litigation Branch. The case was investigated by NCIS Special Agent Riley Proctor, DCIS Special Agent Lam Hoang and Special Agent Jennifer Coleman of the U.S. Army Criminal Investigative Command.

“This settlement is a result of the steadfast efforts of our investigators and our law enforcement partners,” Frank Robey, director of the Army Criminal Investigation Command’s Major Procurement Fraud Unit, said. “Uncovering these types of schemes is a cooperative effort, and we look forward to continuing our work together to eradicate corruption.”

The federal government was represented by Assistant U.S. Attorney Todd P. Swanson and Assistant U.S. Attorney W. Taylor McNeill, both from the Middle District of Georgia, and Andrew Steinberg, of the Civil Division’s Commercial Litigation Branch.

Court officials said Mercer fully cooperated in the government’s pre-intervention investigation. Court said the claims resolved by the settlement are allegations only, and there has been no determination of liability. The case is captioned United States ex rel. James E. Reeves v. Mercer Transportation Co. Inc.