A mother-of-three, a Marine veteran who tried to stop her former employer from defrauding taxpayers, has been awarded $69 million after taking advantage of a little-known law.
Sarah Feinberg, 39, moved up to the ranks of military contractor Booz Allen Hamilton as a financial analyst after her time as a Marine.
While there, Feinberg discovered that the company was overcharging the US government $100 million a year to cover losses in other areas of its business, including consulting contracts with foreign states such as Saudi Arabia.
The company, headquartered in McLean, Virginia, was accused of falsely charging fees on its government and subcontract contracts that should have been passed on to its commercial and international contracts.
The Justice Department said these allegations had lasted a decade, from 2011 to 2021.
Last week it was announced that Booz Allen had reached a settlement to pay the United States $377 million to settle the allegations — and Feinberg and her lawyers, for their part, received $69 million, thanks to the little-known qui tam suit.
Sarah Feinberg, pictured here, was awarded $69 million after reporting her former employer for overcharging the US government on contracts
Sarah Feinberg, pictured here, was commissioned in 2009 and volunteered for a mission in 2009, being assigned to Anbar Province
The qui tam action allows an insider to sue on behalf of the US and then recover between 15 and 30 percent of a settlement or judgment.
Of the $69 million settlement, Feinberg was personally awarded $40 million for reporting her employer’s alleged conduct — $12 million of which she plans to donate to charity.
Feinberg did not intend to capitalize on her decision to sue the company, saying she was not aware she could do so until she presented her findings to the Justice Department.
Speak with NBC newsFeinberg said, “I have three kids and I tell them, ‘doing the right thing is the right thing, whatever the outcome’.
“There are few times in life when you are actually rewarded for doing the right thing, but this is one of those unique situations.”
Feinberg’s story began in 2016 when she spent nine months trying to persuade older, mostly male executives at the company to stop what she believed to be fraud.
“To keep the company profitable, they passed those costs on to the US government contracts,” Feinberg said.
“What I found out was that they were overcharging the government $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 something is happening, or they don’t know what the right thing is.
“So I went to talk to the chief of finance, presented what I had found and asked if he was aware of it.”
The head of the finance department at the time was Warren Kohm, according to a recently opened NBC lawsuit.
Feinberg alleges that Kohm closed his office door, told her to sit down, and made it clear that he knew exactly what she was talking about, the lawsuit alleges.
The lawsuit says he called it a “grey zone,” but added that Defense Department auditors are “too stupid” to figure it out and demand reimbursement.
Feinberg moved to the ranks of military contractor Booz Allen Hamilton as a financial analyst after her time as a Marine
Feinberg told the outlet, “I realized this was a very deliberate setup. And it wasn’t just that there was the potential to overcharge the government; the rates are built to overcharge the government.
“If we had to charge the government $100 for an hour of work, we would charge $120 for that hour of work, so that $20 could be used to subsidize international trade.”
Undeterred, Feinberg continued to try to convince her bosses to end a practice she argued in her lawsuit that she was forced to call “compliance risk” rather than fraud.
She took her concerns to then chief financial officer Lloyd Howell Jr., who is now president of the NFL Players Association, and his successor Matthew Calderone.
According to Feinberg, Calderone wondered why she put her concerns in writing after informing him in June 2016.
In another case, a manager asked her to change the language in a PowerPoint slide, which she viewed as an attempt to soften her criticism.
She said: “So in our private conversations I presented this as fraud – something that the government will notice and we will be punished for. I was told to call it a compliance risk.”
Feinberg continued, “(It made me) very angry as a taxpayer. It upset me very much as a naval officer. I saw how limited our resources were.
Feinberg had taken her concerns to then-CFO Lloyd Howell Jr. and his successor Matthew Calderone, pictured here
“And the idea that Booz was overcharging the US Marine Corps for things that could be related to international contracts was absurd.”
After resigning from the $6.5 billion company, she took her concerns to the Justice Department.
Since the settlement was announced, Feinberg said she has received several messages from current and former Booz Allen employees praising her for her bravery.
In a statement, U.S. Attorney Matthew M. Graves for the District of Columbia said: “This settlement, which is one of the largest procurement fraud settlements in history, demonstrates that the United States will take even the largest companies and the most complex cases to court. prosecute where it is alleged that tax money has been stolen.
“The Department of Justice is committed to detecting all fraud, waste and abuse in government programs – small or large, simple or complex.”
Feinberg also believes plaintiffs should have gotten a larger payment from the company, as they believe they overcharged taxpayers at least $500 million.
“The settlement must be higher than the damages, otherwise you give them an interest-free loan and no penalty,” she told the Washington Post.
In a statement to the Post, Booz Allen spokeswoman Jessica Klenk said that when Feinberg raised her concerns, the company “immediately facilitated meetings for her with outside experts and the finance, compliance and accounting teams to investigate her concerns.”
“The following year, these experts repeatedly confirmed that the company’s practices were lawful and compliant,” she added.
Originally from Columbus, Ohio, Feinberg enrolled in the Marine Corps reserves before graduating from King’s College in New York City.
In officer candidate school, she broke her pelvis while carrying 90-pound backpacks.
In late December 2009, she was awarded the Navy and Marine Corps Achievement Medal for “superior performance of her duties”
Since the settlement was announced, Feinberg said she has received several messages from current and former Booz Allen employees praising her for her bravery.
Feinberg and her lawyers received a total of $ 69 million for their part after they used the qui tam procedure
In 2009, she was commissioned and volunteered for a mission in 2009, being assigned to Anbar Province.
Feinberg led a logistics convoy transporting military equipment to an air base in western Iraq.
During one patrol, she coordinated the recovery of a civilian vehicle after a grenade attack.
In late December 2009, she was awarded the Navy and Marine Corps Achievement Medal for “superior performance of her duties.”
Feinberg returned to the United States in 2010 and joined Booz Allen, a popular landing ground for military veterans.
She spent four years on contracts with the Pentagon to help the Marine Corps improve wartime operations in Afghanistan.