Whistleblowers may collect $411K in Fraud Case Involving Government Vendor

May-31-08

Two men who blew the whistle on a government vendor may soon receive nearly half a million dollars for the role they played in reporting fraud involving government contracts.

Computer Sciences Corporation (CSC), an information technology and business services company, agreed to pay $1,370,000 to settle allegations that it solicited and received improper payments and other things of value on technology contracts with government agencies according to the United States Department of Justice. The settlement resolves an action against CSC under the qui tam provisions of the False Claims Act, 31 U.S.C. § 3730, filed by Norman J. Rille and Neal A. Roberts in September 2004. After an investigation, the Department of Justice joined the action.

The False Claims Act allows a private individual or "whistleblower", with knowledge of past or present fraud on the federal government, to sue on behalf of the government to recover stiff civil penalties and triple damages.

Fraud under the False Claims Act means that a contractor has knowingly presented a false claim for payment to the United States. The fraud can occur wherever federal or state monies are directly or indirectly used to purchase services or goods.

The complaint against CSC alleged that the company knowingly solicited and/or received payments of money and other things of value, known as alliance benefits, from a number of companies with whom it had global alliance relationships. The government intervened in these actions because the alliance relationships and resulting alliance benefits amount to kickbacks and undisclosed conflict of interest relationships in violation of contractual provisions and the applicable provisions of the Federal Acquisition Regulations.

The action against CSC is part of a larger ongoing investigation of government technology vendors and consultants that has already resulted in the filing of complaints in April 2007 in Arkansas against Accenture, LLP (Accenture), Hewlett-Packard Company (HP) and Sun Microsystems Inc. (Sun). The qui tam provisions of the False Claims Act allow persons who file successful actions alleging fraud against the government to receive a share of any resulting recovery.

The False Claims Act was enacted during the Civil War. The law was targeted at stopping dishonest suppliers to the Union military at a time when the war effort made it all but impossible for the government to investigate and prosecute the fraud itself. Today it serves a similar purpose because of the size and complexity of federal and state government and the variety or government vendors competing for contracts involving  taxpayer funds.

Generally, only the whistleblower who is the first to file a lawsuit can be rewarded for reporting the fraud. Even if one person uncovers the fraud, someone else can file the lawsuit first and bar the first whistleblower from sharing in any recovery, according to Qui Tam Online, a network of attorneys who have recovered over $150 million in taxpayers' money falsely billed to the United States by government contractors. 

Rille and Roberts, who brought the CSC case to light, will receive an amount to be determined in the near future. The Act provides that whistleblowers may receive from 15-30 percent of the government's total recovery. One, or both of them could collect as much as $411.000 in the settlement.

What you can do:

If you are an individual with information involving fraud by government vendors and have been contemplating blowing the whistle, LegalMatch.com can put you in touch with local attorneys to help you safely bring your case forward. The service is free and confidential.

If you are an attorney with a False Claims case, Qui Tam Online will give you an overview of the law, identify the unique procedural provisions of Qui Tam practice (which might deny your client a recovery) and put you in touch with experienced Qui Tam Practitioners who can help you with your case.

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