Justice Department Forces W International and CEO to Pay 10.5 Million for Overcharging Air Force and Navy in South Carolina

The U.S. Justice Department announced today that four defendants—including two companies and their CEO—have agreed to pay $10.5 million to resolve allegations of overcharging the U.S. Air Force and Navy for weld tables.

The settlement addresses claims under the False Claims Act, a federal law designed to protect taxpayer dollars from fraudulent claims.

Who Was Involved?

The settlement involves W International LLC, a Michigan-based industrial welding and metal fabrication company; W International SC LLC from South Carolina; Precision Metal Equipment Handling LLC, also based in Michigan; and Edward Walker, the CEO of both W International companies.

Precision Metal Equipment Handling manufactured weld tables that W International SC supplied to the military, according to the Justice Department.

Allegedly, the companies submitted inflated invoices for these tables as part of a federal project.

Statements from Officials

“Contractors and subcontractors must charge no more than what’s authorized under their military contracts,” said Assistant Attorney General Brett A. Shumate, head of the Justice Department’s Civil Division.

“We will continue to ensure the government receives the prices it negotiated for defense contracts.”

U.S. Attorney Bryan P. Stirling for the District of South Carolina emphasized the taxpayer impact: “Exploiting the procurement process for our military’s necessary materials unduly increases the burden on taxpayers.

We’ll continue to work with our partners to support our service members and protect public funds.”

Officials from investigative agencies highlighted the seriousness of such violations.

Special Agent in Charge Greg Gross of the Naval Criminal Investigative Service noted, “Contractors who overcharge betray the public’s trust and undermine the Navy’s critical shipbuilding mission.”

Christopher Dillard, Special Agent in Charge of the Defense Criminal Investigative Service’s Mid-Atlantic Field Office, added, “Fraud on DoD contracts diverts critical taxpayer resources away from our warfighters. We remain committed to holding contractors accountable.”

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Background of the Allegations

The allegations stem from federal funds provided to W International SC to refurbish and equip a large-scale welding facility.

Funding was supplied through the Defense Production Act via a U.S. Air Force Technology Investment Agreement and through Navy Supplier Development Funds under a prime contract with General Dynamics Electric Boat.

The government claims that the defendants submitted invoices that overcharged for weld tables supplied for the facility.

These allegations arose from a whistleblower lawsuit under the False Claims Act, filed by John Klausmeier, a former employee of W International SC LLC.

Whistleblower Reward

As part of the settlement, Klausmeier will receive $1,863,750—his share of the recovery for bringing the case to light.

This highlights the role of whistleblowers in helping protect government funds from fraudulent practices.

Legal and Investigative Team

The case was jointly handled by multiple federal agencies and offices, including:

• Department of Justice’s Civil Division, Commercial Litigation Branch
• U.S. Attorney’s Office for the District of South Carolina
• Naval Criminal Investigative Service (NCIS)
• Defense Criminal Investigative Service (DCIS)
• Defense Contract Audit Agency (DCAA)

The trial team included Senior Trial Attorney Greg Pearson and Assistant U.S. Attorney James Leventis.

The lawsuit is officially captioned United States ex rel. Klausmeier v. W International, LLC, Civil Action No. 22-cv-1774, in the U.S. District Court for the District of South Carolina.

It’s important to note that the claims resolved by the settlement are allegations only. No determination of liability has been made.

Impact and Consequences

This settlement serves as a warning to contractors handling military contracts: inflated claims will be pursued aggressively.

Taxpayer funds misused for personal gain not only damage public trust but can delay or hinder critical defense projects.

What’s Next?

Authorities have reaffirmed their commitment to monitor defense contracts closely.

Future audits and investigations are expected to continue, ensuring that all contractors comply with contract terms and federal law.

Summary

Four defendants, including two companies and their CEO, agreed to pay $10.5 million for allegedly overcharging the Air Force and Navy for weld tables.

The case was initiated by a whistleblower, and the recovery includes a substantial reward for him.

No liability has been officially determined, but the settlement reinforces accountability in defense contracting.

Bulleted Takeaways

• $10.5 million settlement reached with W International LLC, W International SC LLC, Precision Metal Equipment Handling LLC, and CEO Edward Walker.
• Allegations involved overcharging the Air Force and Navy for weld tables.
• Whistleblower John Klausmeier receives $1,863,750 of the recovery.
• Settlement underscores federal commitment to protecting taxpayer funds in military contracts.
• No official determination of liability; the claims are allegations only.