ABS Development Corporation Agrees to Pay $2.8 Million to Settle False Claims Act Allegations
Seattle Whistleblower Attorneys report that ABS Development Corporation (ABS) has agreed to pay $2.8 million and give up $16 million in potential administrative claims to settle allegations that it violated the False Claims Act by fraudulently obtaining a foreign military sales contract reserved for American companies. ABS, a Delaware corporation based in New York, is a subsidiary of Ashtrom International, Ltd. of Israel.
The settlement announced today resolves allegations that ABS fraudulently induced the Army to award ABS a contract for the renovation of the Haifa, Israel shipyard by falsely misrepresenting that it would perform the contract when, in fact, its Israeli parent company, Ashtrom, intended to do so; and for presenting false claims to the United States certifying that it was performing work as the prime contractor when in fact the work was performed by Ashtrom. Foreign military sales contracts require prime contractors to be American companies that perform a substantial portion of the work. The Army would not have awarded the contract to ABS, nor paid ABS’ invoices, had it known that Ashtrom, not ABS, was going to perform and did perform the contract.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
Source: Dept. of Justice
The settlement announced today resolves allegations that ABS fraudulently induced the Army to award ABS a contract for the renovation of the Haifa, Israel shipyard by falsely misrepresenting that it would perform the contract when, in fact, its Israeli parent company, Ashtrom, intended to do so; and for presenting false claims to the United States certifying that it was performing work as the prime contractor when in fact the work was performed by Ashtrom. Foreign military sales contracts require prime contractors to be American companies that perform a substantial portion of the work. The Army would not have awarded the contract to ABS, nor paid ABS’ invoices, had it known that Ashtrom, not ABS, was going to perform and did perform the contract.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
Source: Dept. of Justice