An ex-Marine reported company defrauding millions from tax payers, receives $40 million settlement

An ex-US Marine, Sarah Feinberg, has won a settlement of $40 million after outing her previous employer, Booz Allen Hamilton, a firm holding contracts of up to $6.5 billion dollars with the US government, as having committed fraud with taxpayer funds, NBC news reported.

Booz Allen describes itself as one of “the world’s most ethical companies" and has a roster of ex-intelligence officials amongst its ranks.

Whilst working at the company Feinberg discovered that the company held a series of unprofitable foreign contracts, most notably with the government of Saudi Arabia. The company was using funds from its government contracts to make up the shortfall.

Feinberg reported the anatomy upon discovery to then head of finance Warren Kohm. Kohm proceeded to close the office door and explain to Feinberg that the issue was known but that auditors would be “too stupid” to spot the issue.

The complaint was filed under the False Claims Act, which allows organization insiders to sue on behalf of the US and allocates 15% to 30% of any final settlement. The court awarded the prosecution a total of $377 million of which 40% million was awarded to Feinberg.

Following the lengthy investigation, Booz Allen admitted no wrongdoing while paying the unusually large settlement, which officials said was the third largest contract fraud settlement ever.

A teaching moment

“I’ve got three kids, and I tell them, ‘Doing the right thing is the right thing, no matter what the outcome is,’” said Feinberg, who volunteers at a Capitol Hill church. Feinberg has stated that she intends to donate $12 million of her share. “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.”

Booz Allen did not agree to an interview but noted that a separate inquiry was dropped without charges.