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Whistleblower Lawsuit Unsealed for Derco Aerospace

Derco Aerospace, Other Tech Companies, Face Whistleblower Lawsuit for Overbilling

Derco AerospaceA new whistleblower lawsuit has been unsealed by the Department of Justice involving United Technologies Corp, and three of their units – one of which is Derco Aerospace – for overbilling the United States government for a Navy contract in 2006.

The whistleblower, Mary Patzer, filed a qui tam lawsuit  against Derco Aerospace in 2011. She said that the company submitted bills to the Defense Department that had a 20% mark-up, which was prohibited under the terms of the contract with the Navy. The whistleblower lawsuit also claims that UTC and Derco Aerospace used special software to automatically add the mark-up. The companies overbilled the US government by $50 million for aircraft parts.

“This is potentially the largest whistle-blower suit ever filed in Wisconsin under the False Claims Act,” Patzer’s attorney said. The government, under the terms of the whistleblower lawsuit, is entitled to up to triple damages, plus a penalty ranging from $5,500 to $11,000 for each request the companies made for payment. The penalties could add up to $150 million.

Patzer was originally hired by Derco as a financial analyst in 2002. By 2009, she was the point of contact for the company’s defense contract audits.

“In the course (of) her employment, Patzer gained firsthand knowledge of fraudulent and improper billing practices by Derco and its parent and affiliated companies,” the whistleblower complaint says. “Such practices included presenting inflated bills for costs to the United States government based on an unauthorized and undisclosed markup of parts and repair services obtained from suppliers, billed to Sikorsky Support Services Inc., and ultimately billed to the United States government.”

“I had to stand up and do the right thing. But after I questioned the markups with the company, I was walked out,” Patzer said in a statement through her attorney.

It is illegal for companies to take retaliatory action against employees (whistleblowers) who bring such concerns forward. In many cases, including Patzer’s, companies often go back and list the cause of termination as unrelated to the whistleblower case – in this instance, Patzer’s former employer claimed that she was fired as a larger “reduction in force.”

The whistleblower lawsuit was unsealed on August 12th by US District Judge Rudolph Randa, four days after the federal government said it would join the whistleblower case.

The Strom Law Firm Can Help Protect Whistleblowers with the False Claims Act

The False Claims Act, also known as the Whistleblower Act or a qui tam lawsuit, is intended to encourage people to come forward with information and assist the government in stopping the waste of Government funds.

Common whistleblower actions include:

  • Medicare fraud,
  • defense contractor fraud, and
  • other kinds of fraud.

If you are personally aware of a fraud that has been committed by your current or former employer, a competitor or otherwise, contact the Qui Tam attorneys at the Strom Law Firm today for a no cost consultation to discuss the facts of your case and whether filing a whistleblower lawsuit may be appropriate. We understand the complexity of the False Claims Act, and can help you with your case. We offer free, confidential consultations so contact us for help today. 803.252.4800.



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