WHISTLEBLOWER, QUI TAM

GOVERNMENT INTERVENES IN LAWSUIT AGAINST TECHNOLOGY COMPANY

HOUSTON (Oct. 17, 2005) — The United States today intervened in a False Claims Act case against Lithium Power Technologies, Inc. (LPT) and its President, CEO, and primary shareholder, Mohammed Zafar A. Munshi. The United States joined in the lawsuit that was originally filed by Alfred J. Longhi, Jr. in November 2002. Longhi is represented in the case by Mitch Kreindler of Kreindler & Associates

The False Claims Act, pursuant to which Longhi and the United States have brought suit against the defendants, empowers private citizens with knowledge of fraud against the United States to file suit on behalf of the United States. The relator, as a False Claims Act whistleblower is known, is entitled to receive between 15% and 25% of the proceeds recovered by the Government as a bounty for his efforts.

The Government’s Claims

The Government’s complaint mirrors the allegations raised by Longhi in his initial filing. The United States alleges that Munshi and LPT made false statements to the United States and engaged in a pattern of fraudulent conduct to improperly obtain payments from the United States under Government-funded research contracts awarded to LPT by the Army, Air Force, Missile Defense Agency and NASA. The United States alleges that the defendants submitted duplicate research proposals to different federal agencies, billed different federal agencies for the same work and research, billed federal agencies for work that they did not perform, and manipulated time sheets and research logs to bill time spent on commercial contracts to the United States. The United States asserts that it paid LPT at least $2.0 million dollars to which LPT was not entitled and seeks damages and penalties totaling more than $5.0 million under the False Claims Act and other legal theories.

Longhi’s Became Disillusioned with the Defendants’ Business Practices

In 1997, Longhi assisted defendant Munshi in recruiting investors for LPT and personally invested a six-figure sum, obtaining an 8.4% share of the company. In March 2000, buoyed by reports of defendants’ successes, Longhi joined LithiumPower Technologies as its Vice President for Sales and Marketing, a position that allowed him to closely observe the company’s performance of Government-funded contracts. Longhi’s employment with LPT ended in November 2002 after Munshi informed him that he was being laid off as a cost cutting move. At the time of his separation from the company, Longhi entered into an agreement with Munshi in which, among other things, he sold his stock to Munshi at a substantial discount.

During his employment, Longhi became increasingly concerned with the company’s business practices and its fraudulent performance of Government contracts. Longhi sought counsel from Kreindler & Associates to file his qui tam suit. Since that time, he has worked closely with Government agents and attorneys to explain the scope of the defendants’ wrongdoing and provide a “road map” for the Government’s investigation. “I pursued this case because I believe people must stand up against fraud, particularly when it is being committed against the American government,” said Longhi. “I know I could have walked away and avoided all the effort it has taken to bring this case. But I needed to take a stand. I would not be able to talk to my kids about doing the right thing, if I walked away from this. Talk is cheap. I knew I had to take action.”

Longhi worked with Kreindler & Associates to file his False Claims Act case. “Al Longhi has put in many long hours to put this case together and assist the government’s investigation,” said Longhi’s lawyer Mitch Kreindler. “He is sincere in his belief that fraud against the American public cannot be tolerated and patriotic in his desire to repulse what he sees as an attack on the values that have made our country great.” Longhi spurred the Government to action during the fall of 2002 when he filed his suit and brought the defendants’ wrongdoing to the Government’s attention. The Government quickly assembled a team to investigate the matter and, in December 2002, executed search warrants at LPT’s offices and Munshi’s residence.

Longhi’s Claims

Longhi’s broader allegations include claims that LPT and Munshi defrauded federal research programs by:

submitting false proposals that misrepresented company capabilities, key personnel, and the entities that were to perform and did perform work under certain Government-funded contracts, thereby fraudulently inducing the Government to award contracts to defendants;

submitting false statements and records misrepresenting that efforts under separate Government contracts were not related or duplicative, thereby fraudulently inducing the Government to award contracts to defendants;
submitting false reports to the Government describing work that was either not performed or performed in connection with other Government contracts;
submitting to the Government false invoices indicating that work performed for commercial clients was reimbursable under Government-funded contracts;
falsifying employee time records in order to generate false documentation to support false invoices submitted for payment to the Government;
submitting to the Government false invoices seeking payment for services that were not rendered;
overcharging the Government for materials, equipment, supplies and overhead expenses by duplicating the billing for such items on multiple Government contracts;
submitting false records to the Government for approval and payment under various Government-funded contracts; and
fraudulently diverting funds procured under Government contracts from their intended purposes to fund defendants’ commercial ventures.

LPT maintains its principal place of business in Manvel, Texas, south of Houston. The company seeks to design and manufacture a new generation of primary and rechargeable lithium-based power sources, electrochemical capacitors and co-polymer film capacitors for commercial and Government applications. During Longhi’s tenure at LPT, the company’s commercial ventures produced insignificant revenues, and LPT’s existence was dependent on Government-funded research contracts.

A copy of the Government’s press release announcing its intervention in Longhi’s lawsuit can be found at http://www.usdoj.gov/usao/txs/releases/index.html .

Not certified by the Texas Board of Legal Specialization.

[Client Service] [False Claims Act] [Filing a Case] [Resources] [About Us] [Contact Us] [Site Map] [Home]

©2002 Kreindler & Associates All Rights Reserved

PowerAdvocates