The settlement resolves allegations under the False Claims Act that SECO knowingly violated the Buy American Act by providing the U.S. Army with Chinese parts while concealing the country of origin of the parts and knowingly provided unapproved substitute parts to the U.S. Army.
In 2019, our client, C. Ashley Royal, Jr., filed his lawsuit under the qui tam or whistleblower provisions of the False Claims Act alleging that SECO had defrauded the government. SECO sells a significant volume of military equipment, spare parts, and other products to the U.S. Army Tank-automotive & Armaments Command (TACOM). One of the TACOM programs in which SECO participates is the Simplified Non-Standard Acquisition Program. Through this program, the U.S. Army solicits bids from contractors for commercial and nonstandard military parts and then donates these items as foreign aid to its allies. Contractors are required to identify any substituted parts and any parts manufactured outside of the United States or other qualifying countries. Contractors are also required to certify compliance with the program requirements.
Improper product substitutions not only potentially jeopardize the safety of the end-user allied governments, but they also harm the U.S. Army’s reputation abroad. As Acting U.S. Attorney David H. Estes said, “Defense contractors have an obligation to provide the government what they say they will.” Similarly, Special Agent in Charge Cynthia Bruce of the Department of Defense Office of Inspector General, Defense Criminal Investigative Services made clear, “This settlement makes it clear to those who provide the government with substitute parts that they will be held accountable for violating their commitments.”
Under the False Claims Act, private citizens may file lawsuits on behalf of the government and receive a share of the government’s recovery. The False Claims Act also affords protection to whistleblowers from retaliation. After blowing the whistle on SECO’s allegedly fraudulent procurement practices, Mr. Royal assisted in the government’s investigation, and as a result, he received a share of the proceeds of the government’s recovery in the case.
Pope McGlamry is honored to represent clients such as Mr. Royal who bravely blow the whistle on those who commit fraud against the government, whether it is contractors providing unapproved substitute parts to the U.S. Army or health care providers submitting false claims to Medicare or Medicaid.
We commend the excellent work of the United States Attorney’s Office for the Southern District of Georgia, including Assistant United States Attorney Patrick Schwedler and Assistant United States Attorney Jonathan Porter, and the skilled special agents from the U.S. Army Criminal Investigation Command and the Defense Criminal Investigative Service in obtaining this settlement. A copy of the United States’ press release can be found here.
The lawsuit is captioned United States ex rel. Charles Ashley Royal, Jr. v. Southeastern Equipment Company, Inc.; SECO Parts and Equipment Company; B. Roy Smith; and Byron M. Morris, Civil Action No. 1:19-cv-19-JRH (S.D. Ga.).