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CDI Corp Pays Near $2M For Fraudulent Labor Charges Under Military Contract

December 6, 2010

Who’s going to notice a false 0.5 billable hour here or there?  For nearly five years no one did.  Under a recent False Claims Act settlement, CDI Corporation — a labor subcontractor to military contractors — will repay almost $2 million for alleged “wrongfully charged labor costs to work orders under military aircraft engine contracts for The General Electric Company.”

“[F]rom Jan. 15, 2001, to Dec. 31, 2006… [t]he civil investigation found that during this time period, CDI directed the mischarging of employees’ labor costs to purchase orders that would be reimbursed by the U.S. military. In fact, the employees did not perform the work billed to those military projects. CDI entered these mischarged labor costs in increments of 0.5 hours or less to evade detection.”

Former CDI employee Vicki Lanich blew the whistle on the company and will receive $360,750 as an award out of the settlement.

To report defense contracting fraud, contact Frohsin & Barger.

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