Marine vet turned whistleblower awarded huge sum for exposing defense contractor Booz Allen Hamilton

A Marine veteran has hit a big payday after turning whistleblower on defense contractor Booz Allen Hamilton for defrauding the US government to the tune of $100 million a year.

(Video Credit: NBC News)

Sarah Feinberg, 39, a mother of three, has been awarded $69 million for exposing the contractor, according to the Daily Mail. She’ll see $40 million of that amount and then will reportedly donate $12 million to charity.

Feinberg served multiple combat tours in Iraq. After leaving the Marines, she became a financial analyst for Booz Allen Hamilton and did her job just a little too well. She uncovered the massive overcharging to cover losses in other areas of the company’s business. That included consulting contracts in foreign countries such as Saudi Arabia.

The defense contractor is headquartered in McLean, Virginia – a hub for intelligence agencies and military contractors. According to the Daily Mail, the company was accused of fraudulently charging the government via its contracts and subcontracts for costs that should have been billed to commercial and international contracts.

The Department of Justice is claiming that the alleged fraud went on for a decade from 2011 to 2021.

Booz Allen Hamilton agreed last week to pay the federal government $377 million in restitution. Feinberg and her legal team received the $69 million payout due to a little-known qui tam procedure.

Qui tam is a type of lawsuit based on an ancient writ in common law that allows a private person, known as a qui tam relator, to prosecute a lawsuit for the government and receive a reward. That can add up to 15 to 30 percent of a settlement or judgment.

Feinberg went into the legal proceedings as a whistleblower not intending to profit from the suit. She reportedly just wanted to do the right thing. The Justice Department informed her she would be entitled to a portion of the settlement or judgment.

“I’ve got three kids, and I tell them, ‘doing the right thing is the right thing, no matter what the outcome is,'” Feinberg told NBC News in an interview. “There’s very few times in this life where you’ll actually be rewarded for doing the right thing, but this is one of those unique situations.”

All of this started back in 2016 when the veteran attempted to convince executives for nine months that what they were doing financially amounted to fraud.

“In order to keep the company profitable, they were passing those costs on to the US government contracts,” Feinberg charged. “What I discovered was that they were overcharging the government by $100 million a year.”

“I was very naïve at the time, and I thought that the reason people do the wrong thing is because they don’t know that something is happening, or they don’t know what the right thing is. So I went and I talked to the head of finance and presented what I had found, and asked if he was aware of it,” she recounted.

Warren Kohm was the head of finance at the time, according to NBC News. When Feinberg went to him, he reportedly closed the door to his office and informed her he was indeed aware of the fraud, according to the lawsuit.

Kohm reportedly called the practice a “gray zone.” He told her that Defense Department auditors are “too stupid” to figure out what was transpiring and demand repayment.

“I realized that this was a very intentional setup. And it wasn’t just that there was the potential to overcharge the government; the rates were built to overcharge the government,” she told NBC News.

“If we should have been charging $100 to the government for an hour of work, we were charging $120 for that hour of work, so that $20 could go to subsidize the international business,” the Marine noted.

Feinberg continued trying to get her bosses to stop the practice. She was told to call it a “compliance risk” rather than outright fraud.

“[It made me] very upset as a taxpayer. It made me very upset as a Marine officer. I saw how limited our resources were. And the idea that Booz was overcharging the U.S. Marine Corps for things that could be related to international contracts was absurd,” she angrily stated.

Her next stop was then-Chief Financial Officer Lloyd Howell Jr. He is now the director of the NFL Players Association. She also told his successor Matthew Calderone.

Calderone wanted to know why she put her concerns in writing after telling him in June 2016 of the fraud.

Eventually, Feinberg resigned from the company. She took her findings to the Justice Department.

“This settlement, which is one of the largest procurement fraud settlements in history, demonstrates that the United States will pursue even the largest companies and the most complex matters where taxpayer funds are alleged to have been pilfered,” US Attorney Matthew M. Graves for the District of Columbia said in a statement.

“The Justice Department is committed to ferreting out all fraud, waste, and abuse in government programs — small or large, simple or complex,” he asserted.

Feinberg believes the company overcharged the federal government at least $500 million, which is more than the settlement.

“The settlement has to be more than the damages or you’re giving them an interest-free loan, not a penalty,” she told The Washington Post in an interview.

In turn, Booz Allen Hamilton’s spokeswoman Jessica Klenk told the Washington Post that the company “promptly facilitated meetings for her with third-party experts as well as its financial, compliance, and accounting teams to examine her concerns.”

“Over the next year, these experts repeatedly affirmed that the company’s practices were lawful and compliant,” she declared.

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