Indian American Defense Contractors Face Lawsuit over alleged False Claim

MOORESTOWN, NJ (TIP): The United States filed a civil fraud lawsuit on Sept 28 against Babu (Bob) Metgud and Shubhada (Sue) Kalyani, of Moorestown, New Jersey, and four companies, Shubhada Industries, d/b/a Shubhada, Inc., Metcon Aerospace & Defense, d/b/a Metcon Industries, NRI Capital Corporation, and The Innovation Technology & Enterprise Development Center, Inc. The complaint, announced by Acting United States Attorney Louis D. Lappen, alleges that the defendants engaged in a scheme to overcharge the military for spare vehicle parts.  

 According to the complaint, Shubhada Industries described itself as a manufacturer to the Defense Logistics Agency and agreed to manufacture two light assemblies, a type of turn signal for munitions vehicles. But instead of manufacturing these assemblies, Shubhada Industries allegedly purchased them from someone else for $1,351.62, charged the military $73,842.00 for the same items—a 5400 percent markup—and pocketed the difference. The complaint alleges that when the government asked Metgud about the price, he made false statements describing Shubhada Industries’ non-existent manufacturing process and encouraged the military to buy more of the items. Kalyani likewise allegedly made false statements to conceal the company’s actual role as a dealer instead of a manufacturer.

 The complaint additionally names as defendants Metcon Industries, the entity through which Metgud purchased the light assemblies, and two other alleged alter egos of Shubhada Industries.

 “This case is another example of the commitment of our office to hold accountable those who cheat the government by charging excessive fees for their products,” said Acting United States Attorney Louis D. Lappen.  “We will continue to use our resources to ensure that those who do business with the government are truthful and transparent in their dealings and treat our taxpayers fairly.”

The United States filed the lawsuit under the False Claims Act. Under the False Claims Act, a person who causes false or fraudulent claims to be submitted to the government for payment is liable for three times the government’s damages, plus civil penalties for each false claim. The complaint contains allegations only, and not findings of liability.

Be the first to comment

The Indian Panorama - Best Indian American Newspaper in New York & Dallas - Comments