Who is Sarah Feinberg? Marine vet awarded $69M for exposing taxpayer fraud by defense contractor Booz Allen Hamilton
MCLEAN, VIRGINIA: Sarah Feinberg, a Marine veteran and a mother-of-three, has been rewarded a remarkable sum of $69M.
She was awarded the staggering sum after using of an unfamiliar legal provision to expose her former employer's deceitful practices, which were imposing a financial burdens on taxpayers, per the Daily Mail.
Following her service in the Marines, Feinberg took on the role of a financial analyst within Booz Allen Hamilton, a military contracting company based in Virginia.
Did Booz Allen Hamilton pay $377 million?
During her tenure, Feinberg uncovered a significant discrepancy: the company was found to be excessively charging the US Government, amassing nearly $100M annually.
This surplus cash was redirected to cover losses in other sectors of the company, even involving international contracts, including those with foreign nations such as Saudi Arabia.
Feinberg told NBC, "[It made me] very upset as a taxpayer. It made me very upset as a Marine officer. I saw how limited our resources were."
She added, "And the idea that Booz was overcharging the U.S. Marine Corps for things that could be related to international contracts was absurd."
Accusations emerged that the company had misallocated expenses, erroneously billing government contracts and subcontracts instead of assigning them to their proper commercial and international counterparts.
The allegations continued and grew over a decade, spanning from 2011 to 2021, as stated by the Department of Justice.
In the most recent development, the firm has opted to settle by paying a substantial sum of $377M to resolve these claims.
This resolution has also resulted in a notable outcome for Feinberg, a $69M award granted to her and her legal team.
This achievement was made possible through the relatively lesser-known legal procedure called qui tam.
What is qui tam?
Through qui tam, someone within the organization can file a lawsuit on behalf of the government.
If the lawsuit leads to a settlement or court decision, the person can receive a portion of the recovered amount, typically between 15% and 30%.
Out of the $69M settlement, Feinberg personally received $40M for reporting her employer's alleged actions. She intends to donate $12M of this amount to charity.
Feinberg did not have any plans to profit from her decision to expose the company's behavior. She became aware of the possibility of financial benefit only when she presented her findings to the Justice Department.
Feinberg reportedly said, "I've got three kids, and I tell them, 'Doing the right thing is the right thing, no matter what the outcome is.'"
She added, "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."
Back in 2016, Feinberg spent nine months attempting to convince mostly older male executives at the company to notice what she deemed fraudulent actions.
Feinberg said, "In order to keep the company profitable, they were passing those costs on to the US government contracts."
She added, "What I discovered was that they were overcharging the government by $100 million a year."
"I was very naive at the time, and I thought that the reason people do the wrong thing is because they don't know that something is happening, or they don't know what the right thing is," she further said.
"So I went and I talked to the head of finance, and presented what I had found, and asked if he was aware of it," she recalled.
According to a lawsuit recently unsealed and reported by NBC, Warren Kohm, who was the head of finance at that time, played a pivotal role.
Feinberg said that Kohm, in response to their conversation, shut his office door, asked her to sit down, and conveyed his awareness of the matter at hand.
The lawsuit stated that Kohm referred to the situation as a "gray zone," and further commented that Defense Department auditors were incapable of comprehending it and requesting reimbursement due to their lack of understanding.
Feinberg said, "I realized that this was a very intentional setup. And it wasn’t just that there was the potential to overcharge the government; the rates were built to overcharge the government."
"If we should have been charging $100 to the government for an hour of work, we were charging $120 for that hour of work, so that that $20 could go to subsidize the international business," she added.
Feinberg asserted, as mentioned in her lawsuit, that she was directed to refer to it as "compliance risk" rather than fraud.
She escalated her concerns to then-chief financial officer Lloyd Howell Jr, who currently holds the position of director at the NFL Players Association, as well as his successor, Matthew Calderone.
Feinberg recounts that after briefing Calderone in June 2016, he questioned her decision to document her concerns in writing.
On a separate occasion, a manager requested her to modify the language in a PowerPoint slide, which she perceived as an attempt to soften her critique.
She said, "So in our private conversations, I was presenting this as fraud — something that the government will catch and we’ll be penalized for it. I was told to call it a compliance risk."