S. Korean firm settles claim at U.S. base
A whistle-blowing employee in Hawaii will receive $240,000
An electronics company has settled a lawsuit filed in U.S. District Court in Hawaii alleging that it falsified inspection records for fire alarms and safety equipment on U.S. bases in South Korea, said U.S. Attorney Edward Kubo Jr.
The South Korean company, Shinwha Electronics Inc., agreed to pay $1.2 million to the United States, $240,000 of which goes to a Hawaii man who blew the whistle on the company, his former employer.
The man was formerly employed as a fire inspection supervisor for Shinwha Electronics of Seoul. The case was filed in Hawaii by the former Shinwha Electronics worker, who wishes to remain anonymous. The case was transferred to Washington, D.C., shortly before it settled.
"The settlement is the first case in the United States brought under the federal False Claims Act against a foreign company for false billings for work on a foreign military base," said Thomas Grande in a news release.
The False Claims Act is a law that allows private citizens who know of fraud on the government to sue and share in the proceeds of a recovery, Grande's news release said.
The fire inspection supervisor complained Shinwha did not have the equipment needed to test fire safety systems, including sprinklers and fire alarm systems, Grande said. Despite the lack of test equipment, the company recorded that the equipment was in good working order.
The suit also alleged Shinwha did not have trained fire safety inspectors on the contract and falsified work done on Army and Air Force bases in South Korea.
"The case is also significant because it means that fraud against the government -- even when it takes place in foreign countries -- is not beyond the reach of the American justice system," Grande said.
Co-counsel Warren Price said a lot of work went into proving the fraud, reviewing thousands of inspection checklists to prove the fraudulent inspections. He praised Assistant U.S. Attorney Tom Helper, Department of Justice Maj. Art Coulter and Army Criminal Investigation Division Special Agent Mick Hipsher for their work.
The settlement includes the dismissal of a $407,564 claim by the company against the United States for nonpayment on the contract, the U.S. attorney's news release said.