June 30, 2021
Military Transport Contractor Settles False Claims Act Allegations and Pays FAA-Assessed Penalties
On June 30, 2021, AAR Corp (AAR), and its wholly owned subsidiary, AAR Airlift Group Inc. (Airlift), entered into a civil settlement agreement with the U.S. Attorney’s Offices for the Southern District of Illinois and Middle District of Florida and the U.S. Department of Justice, Civil Division. AAR and Airlift agreed to pay $11,088,000 to resolve False Claims Act allegations connected to two aircraft maintenance contracts that Airlift held with the U.S. Transportation Command (USTRANSCOM). AAR and Airlift also agreed to pay a $429,273 penalty to FAA to resolve a separate matter that cited deficiencies in Airlift's aircraft maintenance. The contracts with USTRANSCOM directed Airlift to provide air transport services to the Department of Defense (DoD). The United States alleged that, between 2012 and 2018, Airlift submitted or caused false payment claims to be submitted to the Government for aircraft maintenance services that it did not perform and falsely represented that DoD aircraft were fully mission capable. Additionally, according to FAA, Airlift allegedly committed operational and maintenance violations prohibited by the company’s Part 135 Certification. The settlement agreement was neither an admission of liability by AAR nor a concession by the United States that its claims were not well-founded.
DOT-OIG conducted this investigation with the Air Force Office of Special Investigations, Defense Criminal Investigative Service; Army Criminal Investigation Command; Naval Criminal Investigative Service; and Special Inspector General for Afghanistan Reconstruction, with assistance from FAA and USTRANSCOM.