Leo Danielides was a program manager at Northrup Grumman, a major U.S. defense contractor. This week a federal judge in Chicago unsealed a complaint filed by Danielides against his former employer in 2009.
According to the complaint, Northrup Grumman defrauded the government of up to $62,000,000. The monies are tied to a contract to furnish anti-missile systems for commercial airliners. The suit was filed under the federal False Claims Act, a whistleblower statute with roots in the American Civil War.
Danielides claims the company “stole” taxpayer monies through creative accounting and false billing. The complaint also suggests the company kept the program alive by lying about performance tests. Ultimately the program was killed in 2008 when Northrup Grumman was unable to develop an effective product.
Commercial airlines have long worried about terrorist attacks tied to shoulder fired missiles. There are now thousands of such weapons missing or unaccounted for. Many are in the hands of rebel groups but a few are thought to be in the hands of terrorist groups.
After an unsuccessful missile attack on a Israeli civilian airliner in 2002 and a DHL cargo plane in 2004, the Department of Homeland Security hired Northrup Grumman to build a system to prevent attacks against U.S. commercial aircraft.
As noted above, Danielides’ complaint was filed under the False Claims Act. That law allows whistleblowers to collect a cash award for reporting fraud that involves a federally funded program. Claims are not limited to defense contractor cases like Northrup Grumman, however. Medicare and mortgage fraud cases top the list of the most common whistleblower cases.
To receive a whistleblower award under the False Claims Act, there must be fraud against a taxpayer funded program and the person seeking the award must have original source information. As Northrup Grumman’s former program manager, Danielides obviously had “inside” information.
To claim an award, one must file a lawsuit under seal in federal court. The government then has the opportunity to investigate the claims. In our experience, the average investigation takes 2 years. During that time, the complaint is sealed meaning it remains secret.
Once the government has finished the investigation, it must decide whether to intervene and takeover the case or allow the whistleblower to prosecute the case. Most whistleblowers bring these cases with the hope that the government will takeover with their superior resources and an army of investigators, special agents and prosecutors.
Unfortunately for Leo Danielides, the government did not intervene despite a 5 year investigation. As is typical, the Justice Department declined to comment as to why they rejected his claims.
Once unsealed, these cases offer a fascinating look into the fraud and greed that takes place inside many companies.
Unfortunately for Danielides, the government declined to intervene in the Northrup case. Without the government’s support and backing, most whistleblower cases go nowhere.
If you think you have knowledge of a fraud against the government or government funded program, contact an experienced whistleblower attorney. Having the right lawyer often means the difference between receiving a big check (up to 30% of what the government collects) or having the government lose interest.
For more information, contact attorney Brian Mahany at or by telephone at (414) 704-6731 (direct). Our whistleblower lawyers have handled some of the largest cases in the United States including the $2.4 billion case against Allied Home Mortgage.
(Whistleblower photo courtesy of Dave Winer – scriptingnews)