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Armored vehicle maker to pay $50 Million to Marine Corps to settle fraud claim

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An Illinois defense manufacturer is having to shell out $50 million to quell allegations of fraud over armored vehicle components, the Department of Justice confirmed Thursday.

Navistar Defense LLC was outed for the alleged fraud, thanks to the False Claims Act and Duquoin Burgess, a former government contracts manager for the company.

Navistar has not admitted any liability, but has agreed to pay the massive sum.

Burgess will receive around $11 million out of the settlement, according to Military.com.

“During negotiations for the modification, Navistar was asked to provide sales information on the contract parts to assess the reasonableness of Navistar’s proposed prices,” the DOJ said in a statement. “The United States alleged that Navistar knowingly created fraudulent commercial sales invoices and submitted those invoices to the government to justify the company’s prices.”

The controversy surrounds a 2007 contract to upgrade MRAP suspension systems, and the massive upcharging that followed.

“We believe the allegations were mistaken and misplaced as we know our pricing was fair, reasonable, and competitive,” Navistar said in a statement. “There is nothing more important than the safety and capabilities of those serving our country and our allies,” the statement said, “and we take tremendous pride in the vehicles we manufacture and sustain.”

Mine Resistant Ambush Protected (MRAP) vehicles are staged, waiting to have a full agriculture wash aboard Camp Leatherneck, Helmand province, Afghanistan, April 3, 2014. Every MRAP must go through the agriculture wash to clean all foreign contaminants on the vehicle in order to pass an inspection before being redeployed. (U.S. Marine Corps photo by Cpl Dustin D. March, Marine Expeditionary Brigade Afghanistan/Released)

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