A U.S. Marine veteran has seen her former employer fork out more than $377 million after she took it to court, alleging the government contractor was misusing taxpayer funds to cover loss-making projects.
Booz Allen Hamilton has agreed to pay $377.45 million to settle allegations that it violated the False Claims Act by billing international costs—such as contracts held in Saudi Arabia—to the American government, with which it holds contracts worth $6.5 billion a year.
The alarm was raised by mom of three Sarah Feinberg, who brought the case to prosecutors and, as a result, has taken home a $40 million chunk of the payout.
The Iraq veteran said the result has landed her in the “unique” position of being rewarded for doing the right thing.
“I’ve got three kids, and I tell them, ‘Doing the right thing is the right thing, no matter what the outcome is,’” Feinberg—who took leave from Booz Allen to earn a MBA from the University of Pennsylvania’s Wharton School—told NBC News.
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.”
It was following Feinberg’s graduation from Wharton that she got promoted to tracking internal financial data at the company, which provides a range of management, consulting, and engineering services to a host of U.S. government agencies—and this is when the now 39-year-old began noticing anomalies.
Feinberg said she took her findings to Booz Allen executives and tried to persuade them to change their costing methods. In 2016, after what Feinberg said was nine months of trying to persuade her superiors to change their practices, she quit and took her concerns directly to the Department of Justice.
‘An immensely complex matter’
For its part, Booz Allen insists it has “acted lawfully and responsibly.”
In a statement posted to its website, the company said it had agreed to the settlement in order to avoid a “yearslong court fight with its largest client.”
It added that the DOJ had closed its criminal investigation with no further action two years ago, continuing the settlement decision was made “for pragmatic business reasons to avoid the delay, uncertainty, and expense of protracted litigation.”
In a further statement emailed to Fortune, Booz Allen said that when Feinberg raised her questions “the company promptly facilitated meetings for her with third-party experts as well as its financial, compliance and accounting teams to hear and consider her concerns. Over the next year, these experts repeatedly affirmed that the company’s practices were lawful and compliant. Despite this, the former employee filed the lawsuit.”
The company also highlighted the civil case had ended with no admission of wrongdoing, adding: “The company has always believed it acted lawfully and responsibly, guided by its strong culture of ethics and accountability, and its position has been consistently grounded in facts.”
Announcing news of the settlement, the Department of Justice alleged that Booz Allen “improperly allocated indirect costs associated with its commercial and international business to its government contracts and subcontracts”—though the contracts bore no relationship to each other—and also failed to disclose to the U.S. government the methods of costing its international business.
U.S. Attorney for the District of Columbia Matthew M. Graves said: “This settlement, which is one of the largest procurement fraud settlements in history, demonstrates that the United States will pursue even the largest companies and the most complex matters where taxpayer funds are alleged to have been pilfered.
“The Justice Department is committed to ferreting out all fraud, waste, and abuse in government programs—small or large, simple or complex.”
‘I saw how limited our resources were’
Feinberg said the issue she discovered made her angry as both a taxpayer and a former servicewoman.
“It made me very upset as a taxpayer; it made me very upset as a Marine officer. I saw how limited our resources were,” Feinberg told NBC News.
She described having her concerns by the company rejected as “devastating,” adding: “I wish they would have taken me and the issue more seriously.”
As a volunteer treasurer at her Washington, D.C., church, Feinberg told NBC she intends to give approximately $12 million of her payout to the establishment, but told Politico she wishes the DOJ had pushed for more.
In a statement to NBC News, the DOJ pointed out that Feinberg had signed the settlement, thus agreeing it was “fair, adequate, and reasonable.”
The DOJ did not immediately respond when contacted by Fortune for comment.
