Majority Opinion Permitted Contractor to Profit from Fraud

Washington, D.C. - March 27, 2007. The U.S. Supreme Court, in a 6-2 ruling, permitted a major federal contractor to escape liability for fraud against taxpayers on a technicality. In the case, Rockwell International was found guilty of defrauding taxpayers of 1.3 million dollars. The fraud was disclosed by a whistleblower. However, because the fraud had been “disclosed” to the “public” prior to the whistleblower filing a claim, the Supreme Court overturned a jury verdict, permitting the contractor to profit from its fraud.

In response to the decision, the President of the National Whistleblowers Center, Stephen M. Kohn, issued the following statement:

The Supreme Court overturned the jury verdict, and permitted the contractor to pocket the fruit of its fraud. Rockwell stole from the taxpayers when it failed to adhere to the terms of a binding federal contract. It profited from its fraud. And now the Supreme Court has ruled that it can pocket over one million dollars in illegally obtained taxpayer money. This is a disastrous ruling for the American public. By discouraging witnesses from going forward, the Supreme Court has cut the legs off of America’s most effective anti-fraud law.

• Rockwell International v. U.S., ex rel Stone, 05-1272
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