Charles River Laboratories International has agreed to pay the U.S. government $1.8 million to settle claims that it violated the False Claims Act by improperly charging for labor and other associated costs that were not actually provided on certain NIH contracts, the Justice Department announced. Charles River is a for-profit corporation headquartered in Wilmington, Massachusetts. 

“Contractors are expected to deal fairly with federal agencies when receiving taxpayer funds,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice will continue to ensure that contractors spend taxpayer dollars appropriately and that those who do not are held accountable.”

Charles River holds contracts with NIH for services relating to the development, maintenance, and distribution of colonies of animals as well as the provision of laboratory animals to the NIH. Charles River billed to NIH labor and associated costs of employees at its Raleigh, North Carolina, and Kingston, New York, facilities despite the fact these individuals did not render the services as Charles River had claimed. Charles River disclosed the improper billing to the Department of Justice and the Department of Health and Human Services.

“Companies that do business with the federal government must bill honestly,” said Special Agent in Charge Phillip M. Coyne of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG).

“We expect companies that contract with HHS to provide the services as claimed and paid for by the taxpayers,” said Chief Counsel to the Inspector General, HHS-OIG, Gregory E. Demske. “Charles River’s self-disclosure and resolution of this matter underscores the importance of contractors preventing, detecting, and remediating overcharges of labor costs to HHS. Under our contractor self-disclosure program, OIG is committed to working with HHS contractors that detect fraud issues to review, take any appropriate action, and resolve these matters fairly.”

The case was handled by the Civil Division’s Commercial Litigation Branch and the HHS-OIG. The claims settled by this agreement are allegations only, and there has been no determination of liability.