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Lawsuit Claims Navistar Inflated Prices, Cheated Government On Price Of Military Vehicles

Dave Royse

Navistar International Corp (NYSE: NAV) is accused in a newly unsealed whistleblower lawsuit of cheating the government of more than $1 billion by inflating the cost of military vehicles.

The lawsuit, filed in 2013 but unsealed by the U.S. District Court in Washington, D.C. on Tuesday, seeks $1.28 billion in damages and alleges Navistar officials forged invoices and other data in negotiations over a contract for its Mine-Resistant, Ambush-Protected vehicles, or MRAPs, between 2006 and 2013.

The complaint alleges Navistar overcharged the government for the vehicles and their parts. The suit alleges top company officials were aware of the efforts to mislead military buyers on the costs of the products.

The case was filed by Duquoin Burgess, who worked for Navistar in the Chicago area. The federal government has also intervened to join in the lawsuit.

Navistar Responds

Navistar spokeswoman Lyndi McMillan said the company would defend itself against the allegations.

“We believe our pricing was fair, reasonable and competitive, and we are disappointed the government has chosen to intervene in this matter,” McMillan said in the statement.

Burgess, a former Contract Director at Navistar, “witnessed the fraudulent conduct,” and filed the complaint in 2013 on behalf of himself and the United States, according to a statement by Burgess' lawyers at the firm Sanford, Heisler, Sharp.

The complaint alleges Navistar used false or misleading documents to inflate the typical commercial price for certain vehicle parts, including the chassis, engines and suspension systems, the firm said.

Navistar's stock traded higher by 1% Wednesday at $32.01 per share.

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