WASHINGTON: It might not be a career-ender for Navy officers like we’ve seen over the past several years in the ongoing Fat Leonard scandal, but the Justice Department has won a $20 million settlement with a logistics company that overcharged the Navy for ship husbanding services in ports across Asia, Africa, Panama, North America, South America and Mexico.

According to a Thursday DOJ release, Inchcape Shipping Services Holdings Limited overcharged the Navy for years, and was only brought to task when a trio of whistleblowers — all former Inchcape employees — went to the FBI.

The U.K.-based company, which operates in 70 countries across the globe and boasts about 3,500 employees, violated the False Claims Act by “knowingly overbilling the U.S. Navy under contracts for ship husbanding services,” the DOJ said.



The charges brought by the government in D.C. federal court alleged that between 2005 and 2014, the company and its subsidiaries purposefully overbilled the Navy by submitting invoices that “overstated the quantity of goods and services provided, billing at rates in excess of applicable contract rates, and double-billing for some goods and services.”

Inchcape denied the charges, but agreed to the civil settlement Thursday.

“This settlement demonstrates that the Department of the Navy will continue to hold contractors accountable for the agreements they make to supply our fleet,” said Navy Secretary Richard Spencer. “The Department expects strict adherence to higher standards within the Department and expects the same from its contractors.”

But the Navy might never have found out it was being scammed without the help of several former employees of the company. Noah Rudolph, Andrea Ford and Lawrence Cosgriff used the whistleblower provisions of the False Claims Act to bring suit on behalf of the United States for false claims. The U.S. government joined in, and according to the provisions of the act, the do-gooders will will receive approximately $4.4 million in awards.

Janet Goldstein, a leading whistleblower lawyer, told me that her her clients “spent over a year trying to convince Inchcape executives, including the CEO, to stop defrauding the Navy and come clean. They went to the FBI when it became apparent that nothing was going to change. Our clients are patriots who could not stay silent in the face of what they believed was a massive fraud.”

The Navy had suspended Inchcape from contracting with the U.S. government in 2013, but the relationship restarted in 2014 under the terms of a deal to add additional controls.

The scandal comes as the sea service remains knee deep in another scandal over its dealings with Glenn Defense Marine Asia, run by Leonard Glenn Francis, a Malaysian businessman who pleaded guilty in 2015 to bribery and defrauding the Navy.

As of the end of this month, over 30 civilians and Naval officers have been convicted or are facing charges in that case. So far, six admirals have been disciplined by the Navy.