WASHINGTON, May 29 (Reuters) - A British-based maritime services company has agreed to pay $20 million to resolve allegations it overbilled the U.S. Navy for goods and services provided to American warships at ports around the world, the U.S. Justice Department said on Tuesday.
Privately held Inchcape Shipping Services Holdings Ltd and some of its subsidiaries provided U.S. Navy ships with waste removal, telephone access, ship-to-shore transportation, local security and other services at ports in the Middle East, Africa and Latin America, the Justice Department said in a statement.
A lawsuit charged that between 2005 and 2014 Inchcape knowingly submitted invoices to the Navy overstating the qoods and services actually provided, the Justice Department said in announcing the settlement.
"We trust contractors supporting our warfighters to act with the utmost integrity and expect them to comply with their obligations to bill the government as called for by their contracts," the U.S. attorney for the District of Columbia, Jessie Liu, said in the statement.
Inchcape did not immediately respond to a request for comment. Its previous chief executive resigned in 2015, and it has since hired new management not implicated in the overbilling, according to attorneys involved in the case.
The lawsuit was brought under whistleblower provisions of the False Claims Act by three former senior employees of Inchcape, said Janet Goldstein, one of their attorneys. The former Inchcape employees included a retired Navy Reserve intelligence officer and a former FBI special agent.
The lawsuit said the whistleblowers resigned from Inchcape after discovering the alleged overbilling and bringing it to the attention of the companys chief executive, only to be rebuffed in their effort to stop the practice. They contacted the FBI in 2009 and worked to provide evidence of the fraud, their attorneys said.
Under provisions of the False Claims Act that allow private citizens to share in funds recovered, the three whistleblowers will receive about $4.4 million, the Justice Department said.
The Navy suspended Inchcape from contracting with the U.S. government in 2013. The action affected contracts worth $243 million, a Navy official said at the time.
The action against Inchcape coincided with a Navy scandal over its dealings with another maritime services firm - Glenn Defense Marine Asia, run by Leonard Glenn Francis, a Malaysian businessman who pleaded guilty in 2015 to bribery and defrauding the Navy.
More than 30 other people have been convicted or are facing charges in that case. Six admirals have been disciplined or admonished by the Navy. (Reporting by David Alexander Editing by Leslie Adler)