A federal jury found that an Arizona helicopter maker backed by financier Lynn Tilton defrauded the U.S. military, awarding $36 million in damages to the government and whistleblowers, an amount that could be tripled under a federal law, WSJ Pro Bankruptcy reported. A jury in the U.S. District Court in Huntsville, Ala., determined on Friday that MD Helicopters Inc. broke federal rules for government contractors through its relationship with Col. Norbert Vergez, an Army procurement officer involved in awarding contracts to the company in 2011 and 2012. After retiring from the Army, Col. Vergez went to work in 2013 for Ms. Tilton’s management firm Patriarch Partners LLC and later for MD Helicopters directly, court records show. In 2015, Col. Vergez pleaded guilty to a criminal conflict of interest stemming from his connection to MD Helicopters and to making other, unrelated false statements. Col. Vergez was sentenced in 2016 to five years of probation and a $10,000 fine. Former MD Helicopters employees in 2013 filed a whistleblower complaint against the company and Ms. Tilton, its CEO at the time, saying MD had groomed the colonel for employment while enlisting his aid to secure government work. His job at Patriarch was merely a cover for his true employment at MD Helicopters, according to the complaint. Andrew Wirmani, a lawyer for the whistleblower plaintiffs, said that the amount MD has to pay out in damages is likely to be tripled, as permitted by the federal False Claims Act.
