Boeing Pays $18 Million Settlement for Bilking Government with False Wage Claims

Boeing Co. has paid $18 million to settle allegations that the company submitted false claims for labor charges on maintenance contracts with the U.S. Air Force at its Long Beach Depot Center, the U.S. Department of Justice announced today.

The government alleged that Boeing improperly charged labor costs under contracts with the Air Force for the maintenance and repair of C-17 Globemaster aircraft, one of the military’s major systems for transporting troops and cargo throughout the world.

A request to a Boeing media representative for comment was not immediately answered.

According to the DOJ, the company knowingly charged the United States for time its mechanics spent on extended breaks and lunch hours, and not on maintenance and repair work properly chargeable to the contracts.

“Defense contractors are required to obey the rules when billing for work performed on government contracts,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the DOJ’s civil division. “Today’s settlement demonstrates that the Justice Department will ensure that government contractors meet their obligations and charge the government appropriately.”

The allegations resolved by the settlement were originally brought by former Boeing employee James Thomas Webb under the qui tam -- or whistleblower - - provisions of the False Claims Act. The act permits private individuals to sue on behalf of the government those who falsely claim federal funds, and to share in the recovery.

Webb’s share of the settlement has not yet been determined, the DOJ said.

The claims resolved by the settlement are allegations only and there has been no determination of liability, prosecutors said.

City News Service