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losses or to deter or punish Stencel. The Court of Appeals
stated:
The double damages provision of the FCA has both
compensatory and deterrence purposes. See United
States v. McLeod, 721 F.2d 282, 285 (9th Cir. 1983);
see also Mortgages, Inc. v. United States Dist. Court,
934 F.2d 209, 213 (9th Cir. 1991); United States v.
Northrop Corp., 59 F.3d 953, 965 (9th Cir. 1995).
"[T]he double damages provision of the [FCA] is meant
not only to compensate the government fully but also to
deter fraudulent claims from being filed against it."
McLeod, 721 F.2d at 285. Congress chose the double
damage provision "'to make sure that the government
would be made completely whole.'" Id. (quoting United
States v. Hess, 317 U.S. 537, 551-52, 63 S.Ct. 379,
388, 87 L.Ed. 443 (1943)). At the same time, however,
the double damage provision "'maximizes the deterrent
impact ....'" McLeod, 721 F.2d at 285 (quoting United
States v. Bornstein, 423 U.S. 303, 317, 96 S.Ct. 523,
531, 46 L.Ed.2d 514 (1976)).
Talley Indus., Inc. & Consol. Subs. v. Commissioner, 116 F.3d at
387.
The settlement agreement does not characterize the $2.5
million payment, or any portion thereof, as either compensation
for the Government's losses or as a penalty. In light of this
ambiguity, the Court of Appeals indicated that the deductibility
of the $940,000 amount would have to be resolved by determining
the parties' intent. See id.
Petitioner contends that no portion of the $940,000 in
dispute can be considered a penalty because the Government's
actual losses--including its incidental losses, such as the costs
associated with the investigation, the suspension and debarment
proceedings, the grounding of Navy aircraft for lack of
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