U.S. Joins La Verne Whistle-Blower Suit

The federal government has joined a whistle-blower lawsuit against a La Verne manufacturer, alleging that the company provided the U.S. Postal Service with $11 million worth of faulty equipment and fabricated inspection records to cover its tracks.

The U.S. attorney’s office said Monday that it has taken over prosecution of a lawsuit originally brought by a former quality assurance inspector of the Medcab Division of Pacific Precision Metals Inc., or PPM.

That lawsuit, originally filed by George Ocampo in 1998, accuses PPM of providing defective mail drop units, sorting tables and other equipment to the Postal Service.

PPM officials could not be reached for comment.

Ocampo, who worked for PPM for nine months, claims that the company routinely shipped equipment with weak welds, bad paint jobs, sharp edges and parts that didn’t fit.

He quit PPM in November 1997, just two months after, he alleges, he was ordered by management to falsify inspection documents to fool Postal Service inspectors visiting the La Verne facility for a routine review of PPM’s manufacturing and quality procedures.

“We just made stuff up” to show that PPM was complying with the Postal Service’s contract guidelines, Ocampo said in an interview. “I didn’t want to participate. What we were doing was wrong.”

Ocampo said he reported the alleged wrongdoing to the Office of the Inspector General shortly after he quit PPM. The government then launched its investigation into the allegations.

In the meantime, Ocampo filed a lawsuit under the federal False Claims Act. Certain provisions of that act allow private citizens to bring fraud suits against government contractors and receive a reward ranging from 15% to 25% of any money recovered by the government if the government joins the lawsuit.

Under the act, a contractor who is found to have defrauded the federal government can be liable for up to three times the amount of monetary damages it has caused to the United States, plus civil penalties of $5,000 to $10,000 for each false claim submitted to the government.

That could bring PPM’s liability to $50 million to $60 million, said Ocampo’s attorney, Phillip Benson.

“The equipment was garbage, and they knew it,” Benson said.