Another ship servicer accused of bilking Navy

A second ship servicing contractor is being accused by the federal government of defrauding and overbilling the Navy, resulting in losses of at least $10 million over the past decade.

Last week the Department of Justice announced it was joining in a whistleblower lawsuit filed against Inchcape Shipping Services Holdings Limited, a company headquartered in the United Kingdom.

The suit was originally filed in 2010 by three former employees of the company. It was unsealed Wednesday after the DOJ announcement. The lawsuit was filed under seal as a whistleblower action, which allows private citizens to file complaints alleging fraud and get a percentage of any money the government recovers. Such suits are secret until the government decides if it will join in or not, at which time they become public.

The overbilling allegations echo those the government has made against Leonard “Fat Leonard” Francis and his company, Glenn Defense Marine Asia, as part of a larger bribery and corruption probe that has led to guilty pleas by uniform officers and civilian contracting officials.

Inchcape provides services such as food, fuel, sewage removal and on-shore support for U.S. Navy ships when they arrive in foreign ports. The Inchcape matter is a civil, and not criminal, case.

The suit was filed by three former employees, who said they discovered a wide-ranging fraud scheme and brought it to the attention of senior executives, including former CEO Claus Hyldager, but nothing was done. They ended up leaving the company and began providing information to the government in 2009, the lawsuit says.

The fraud involved submitting invoices to the Navy for services that were either bogus, or inflated the cost of the work, and double-billed for other services. The suit also said the company kept two sets of books to conceal the fraud, and did not pass on savings — such as rebates, discounts and credits — from subcontractors.

The company did not respond to an email seeking comment.

The company’s name surfaced during the the early days of the GDMA scandal in 2013. In December of that year the Navy suspended Inchcape, a rival to Francis’s company, while it investigated unspecified “questionable business integrity” by the company.

Inchcape is one of the largest maritime services companies in the world, operating in 66 countries, according to its website. In a statement lawyers for the three plaintiffs said the Navy has paid the company more than $400 million for ship services under contracts since 2003.