U.S. attorneys have intervened in a whistleblower lawsuit against United Technologies Corp.'s Sikorsky Aircraft Co. that alleges one of its subsidiaries used a sister company to illegally mark up replacement parts provided through a defense contract to the Navy.
Mary Patzer, the plaintiff, was formerly the assistant controller of Sikorsky subsidiary Derco Aerospace in Wisconsin. Derco purchased parts for the contract, then provided them to a different Sikorsky business that forwarded them to the military.
Her case alleges that Derco marked up the parts 20 percent, while the government's contract with Sikorsky mandated that the parts be provided at cost. When the parts were sent from Sikorsky to the government, invoices accompanying the shipments made no note of the markup, Patzer said.
In a statement, Sikorsky spokesman Paul Jackson said the "allegations in the complaint have no merit, and we intend to defend this lawsuit vigorously."
The complaint said Derco presented "inflated bills for costs to the United States Government based on an unauthorized and undisclosed market of parts and repair services obtained from suppliers, billed to [Sikorsky Support Services, Inc.] and ultimately to the United States Government."
Patzer's lawyer, Nola Hitchcock Cross, told the Bloomberg news service that damages in the case are about $50 million, which cover the markups and Patzer's later termination. Under federal law, she said, the amount could be tripled.
The suit, filed in the U.S. District Court in Milwaukee originally in 2011, was unsealed this week when the U.S. attorneys decided to intervene in the case.
Assistant Attorney General Stuart Delery and U.S. Attorney James L. Santelle said in the filing they intend to file their own complaint in 60 days.
Patzer was hired by Derco in 2002 as a financial analyst and a year later became the company's assistant controller for financial reporting and Sarbanes-Oxley compliance. From July 2006 to September 2010, she prepared documents for the company's chief financial officer to review and approve that stated the parts were provided "at cost."
In September 2010, Patzer brought the issue to Sikorsky's U.S. government accounting manager, Dawn Kawtucki, after raising the issue numerous times with CFO Peter Winkler for weeks, the complaint said.
At the end of the month, Patzer was told her position has been eliminated because of a "reduction in force," the complaint said.
Before filing the case in 2011 on behalf of the federal government, Patzer met with U.S. attorneys in Wisconsin, where she lives, and with investigators from the Federal Bureau of Investigation.