Defense Contractor Calnet to pay $18.1 Million to Settle False Claims Act Allegations

Last week, the Department of Justice announced an $18.1 million settlement with Calnet, Inc.  Calnet is an intelligence analysis, information technology, and language services company based in Virginia.  The settlement resolves allegations that the company submitted false claims to the Department of Defense for three different contracts.

Starting in 2005, Calnet had three different contracts with the government to provide translation and linguist services at Guantanamo Bay and other facilities.  Calnet allegedly overstated its provisional-indirect or overhead rates on all three contracts and therefore submitted inflated invoices to the Department of Defense for its work.  The amount of money the United States spends on defense and the military is extraordinarily high.  It is particularly abusive for a company like Calnet to allegedly take advantage of this allocation in the country’s budget to make some extra money for itself.

The government was alerted to Calnet’s alleged fraud by whistleblower and former Calnet employee Kimthy Chao.  Chao filed his lawsuit under the qui tam provisions of the False Claims Act, which allow private citizens to bring a suit on behalf of the government.  Chao will receive $2,669,724.00 as his portion of the settlement.  Tycko & Zavareei applauds Chao for his courage to take a stand against Calnet on behalf of the government and US citizens.

For more information on this case and on other defense contract fraud cases, contact the experienced whistleblower attorneys at Tycko & Zavareei

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