Tuesday, June 19, 2018
Military News

Defense contractor to pay $6M amid allegations of Tampa-based fraud

TAMPA — A Fortune 500 defense contractor has agreed to pay the U.S. government nearly $6 million after a whistle-blower lawsuit exposed a Tampa-based scheme to bypass competitive bidding and award lucrative contracts with little oversight.

The complaint alleges that a Valrico man used military ties, inside knowledge and trickery to convince others he had blanket authority to pay for contracts by appending them to existing ones.

Accusations against retired Air Force Lt. Col. Steve R. Stallings and Science Applications International Corp. proceeded in secrecy for three years under the federal False Claims Act, which allows private parties to sue on behalf of the United States and share in any recovery.

For his efforts, retired Air Force Lt. Col. Timothy Ferner — the whistle-blower — will get to keep nearly $1 million of the $5.75 million settlement, the U.S. Attorney's Office said.

Ferner, who now lives with his wife on an alpaca farm in New Zealand, grew suspicious of contract activity in 2007 while assigned to Nellis Air Force Base in Las Vegas.

Back then, he was new chief of staff for a military entity called the Coalition and Irregular Warfare Center, though no one used the long title. Everything had an acronym.

Scientific Applications International Corp., known as SAIC, was based in McLean, Va., with a regional office in Tampa.

The company evaluates the military usefulness of new products and emerging technologies.

When Ferner's center qualified for counter-terrorism funds, other military and civilian personnel — including his boss — encouraged him to avoid the normal bid process by using middlemen, according to the lawsuit.

An SAIC representative, identified in court records as Paul Fast, hooked Ferner up with Stallings, the Valrico man, whom Fast described as a senior Defense Department employee capable of appending a new contract to an existing one.

Ferner had doubts, but a captain in the base contracts office was familiar with Stallings and the accelerated contract practice. Stallings had a military email address. He sent Ferner an email identifying himself as a government employee, the suit states.

Ferner, a career military officer, went along with it for about two years but still asked questions. He thought it odd, for instance, that a classified military program would have financial ties to a General Services Administration supply account.

His attorney, Elaine Stromgren of Tampa, said Ferner estimates tens of millions of dollars in contracts were diverted.

Ferner wasn't happy. Stallings wouldn't show him how SAIC had spent the money. Ferner questioned the value.

"We were basically paying guys to sit around at computers and play games," he said in a statement released by his attorney.

He demanded to know the name of Stallings' boss.

"I work directly for the Secretary of the Navy," Stallings told him, according to the lawsuit. "Are you sure you want to go there?"

Ferner checked and found it wasn't true.

Stallings portrayed his methods as "Black Ops" and said his home base was White Sands Proving Grounds, the lawsuit states — but he appeared to work from home in Valrico.

The more Ferner asked questions, the more he seemed to get in trouble with bosses.

In September 2009, he was ousted from his chief of staff position and reassigned to another unit.

Initially through military channels and ultimately through U.S. District Court, he sounded an alarm about Stallings, SAIC and another man he suspected of engaging in similar practices.

One stop: Defense Criminal Investigative Services.

"DCIS confirmed (Ferner's) belief that Mr. Stallings misrepresented himself as a government employee in order to improperly obtain millions of dollars in government contracts for SAIC," the lawsuit states.

The contracts were worldwide, with links with U.S. Special Operations Command and U.S. Central Command at MacDill Air Force Base in Tampa.

When he filed a federal lawsuit, the government joined in.

SAIC spokeswoman Jennifer Gephart said Monday the company disputes the allegations but agreed to the $5.75 million settlement "to avoid cost of protracted litigation."

The defense contractor is cooperating with the government, she said, and "continues to operate as an extremely ethical and professional company."

Amy Filjones, spokeswoman for the U.S. Attorney's Office in Tampa, said government attorneys are still in the process of finalizing a settlement with Stallings in the civil case. No criminal charges have been filed.

Stallings, 57, who spoke briefly with the Tampa Bay Times on Monday, said he did not know if he faces criminal charges.

"I have no idea," he said. "There would have to be something done to do that. There are allegations. I have legal counsel. Legal counsel will take care of all that. I don't understand why you all are involved with the allegations."

He referred additional questions to his attorney, who did not respond to an interview request.

News researcher John Martin contributed to this report. Staff writer Patty Ryan can be reached at [email protected] or (813) 226-3382.

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