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Tuesday, May 21, 2024 | Back issues
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Hefty Damages for False Claims Offset by Nigeria

WASHINGTON (CN) - Nigeria's repayment of approximately $108 million in loans to the U.S. Export Import Bank offsets damages from 58 false claims a company made about its business dealings, a federal judge ruled.

Florida-based MWI Corp. sold $82.2 million worth of irrigation pumps and other equipment to seven Nigerian states in 1992, but paid out excessive commission rates to its longtime Nigerian sales agent without disclosing the payments to the government, which financed the deal for Nigeria.

Last year, a jury held MWI liable under the False Claims Act after finding that the company had "knowingly presented 58 false or fraudulent claims for payment to the government," according to U.S. District Judge Gladys Kessler's ruling Monday.

"The real - and difficult - issue in the calculation of total damages is whether ... MWI is entitled to an offset of the $108 million dollars that the Ex-Im eventually received from the federal Nigerian government as repayment of the loans at issue," Kessler wrote.

Citing the U.S. Supreme Court case United States v. Bornstein, Kessler found that the money repaid by Nigeria, which included $33 million in interest, offsets the damages MWI owes for submitting the false claims.

"The government makes a public policy argument that allowing Nigeria's repayments to offset the entirety of MWI liability will 'severely undermine Congress's intent to hold defendants accountable for defrauding the United States and deter others from engaging in similar misconduct,'" Kessler wrote. "However, neither the language of the state nor any prior case provides support for this court to divide Nigeria's repayments into compensatory and non-compensatory payments in light of the fact that the jury found liability for all of the loans in their entirety."

The ruling subtracts the full amount of the Nigerian repayments from the trebled damage total of $22.5 million.

"Thus, the government has been 'made completely whole' because of Nigeria's repayments, and, thus, granting MWI an offset for those payments does not conflict with Bornstein," Kessler wrote.

MWI remains on the hook for $580,000 in civil penalties.

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