U.S. Sues Boiler Repair Firm Over Funds Paid by Pentagon

Marine Boiler Repair Inc., a National City company indicted earlier this year on federal charges of falsifying time sheets to inflate its contracts with the Navy, is the target of a civil lawsuit seeking to recoup payments by the Pentagon.

The suit, filed Friday by the Justice Department in U.S. District Court in San Diego, says Marine and its chief administrator, Stephanie Cardoza of San Diego, conspired to mislead Pentagon auditors by altering and destroying work records for more than a decade, ending in 1983.

The Navy suspended the company from obtaining further military contracts after the indictment of Marine and Cardoza in April on 88 counts of fraud and making false statements. The criminal case is scheduled for trial Feb. 4 in San Diego.

Although the civil suit says the federal government has not yet calculated its total losses from the alleged conspiracy, documents filed in connection with the criminal indictment say a naval audit of one year’s records found that Marine obtained $1.6 million in undeserved payments through the scheme.

Attorneys Surprised

Attorneys for the company and Cardoza said Friday that they were surprised by the filing of the civil lawsuit.

“It’s somewhat unusual to see a civil suit filed immediately prior to a criminal case commencing,” said Marcus Topel, a San Francisco attorney representing Cardoza. “Perhaps the Department of Defense or the local naval authorities are seeking to poison or muddy the waters prior to her trial.”

Documents filed in the cases against the company say Marine was a subcontractor, performing boiler repairs on dozens of Navy ships docked in San Diego Harbor, including the aircraft carriers Kitty Hawk, Constellation and Ranger.